Download - THE NYPE 2015 TIME CHARTER PARTY
THE NYPE 2015 TIME CHARTER PARTY
Bachelor’s Final Degree Project
Barcelona School of Nautical Studies Universitat Politècnica de Catalunya · BarcelonaTech
Candidate:
Sergi Font Manzano
Supervised by:
Dr. Jaime Rodrigo de Larrucea
Bachelor’s Degree in Nautical Sciences and Maritime Transport
Barcelona, February 2021
Department of Nautical Sciences and Engineering
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Acknowledgments
May I start this paper by sharing my gratefulness with all those people who have accompanied
me through the journey of my life and who I hope can keep walking with me for many years to
come.
First of all, I would like to thank my family for always encouraging me to give my best in every
situation of my life and with whom I have been able to count on in both good and bad times.
To my father and my mother, whose love, tenderness and sacrifice have raised me since I was a
child to become a gentle person with strong principles. To my brother, whose advise may I always
follow to keep myself in the correct path, for being my first friend. To all of you, I hope this can
make you feel proud of who I have become.
I would also like to thank all my friends, who have always played a major role in my life. I shall
not say names just in case I miss someone. Your empathy and support during all these years have
made of you my second family. I hope to be worthy of your friendship for many more years.
To my colleagues of UASC and Hapag-Lloyd, again I would rather not say names so as not to forget
any of them, thank you for believing in me from the first moment and for giving me the
opportunity to develop myself and grow not only professionally but also personally.
To conclude, a special mention to Dr. Jaime Rodrigo de Larrucea, who I have been fortunate to
have as a teacher and who has guided and advised me to perform a project of which I feel proud
about. His lessons and lectures inspired me to focus on maritime law and the chartering business,
therefore I can only wish that he can keep inspiring the next generations of maritime students.
To all of you, thank you from the bottom of my heart.
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Resumen
Este trabajo de fin de grado trata sobre pólizas de fletamento por tiempo de buques mercantes,
más concretamente de la NYPE 2015. Viajando desde los términos más amplios del actual
mercado marítimo y de los tipos de pólizas de fletamento existentes en la actualidad, se realiza
un extenso y detallado análisis de la póliza NYPE, sus características y clausulas des de su primera
publicación relevante en el año 1946. Estudiando sus distintas versiones a través del tiempo y
consultando las informaciones facilitadas por las principales organizaciones mundiales del
negocio marítimo, se analiza su evolución y progreso hasta llegar a su última actualización en el
año 2015, constituyendo esta el capítulo principal de este proyecto.
Asimismo, y basándose en los análisis previamente mencionados, este trabajo de fin de grado
trata de proporcionar al lector una visión concreta sobre los elementos más importantes de la
NYPE 2015 y realizar una crítica constructiva y objetiva de los pros y los contras de su uso.
Finalmente, y des de un punto de vista personal, se concluye que dicha póliza debe ser tratada
con cautela debido a su complejidad, al cual sus usuarios pueden encontrar más útil de utilizar
como base adaptable a sus negocios marítimos particulares.
Palabras clave: Derecho Marítimo; Negocio Marítimo; Pólizas de Fletamento; Fletamento por
Tiempo; The New York Produce Exchange; Póliza NYPE; BIMCO; ASBA; y SMF.
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Abstract
This final degree project deals with time charter parties for merchant ships, more specifically the
NYPE 2015. Traveling from general terms of the actual maritime market and the types of charter
parties existing nowadays, an extensive and detailed analysis of the NYPE charter party is carried
out, including its characteristics and clauses since its first relevant publication in 1946. By
analyzing its different versions over time and consulting the information provided by the main
world organizations of the maritime business, this paper focuses on its evolution and progress
until reaching its last update in 2015, constituting this the main chapter of this project.
Likewise, and based on the previously mentioned analysis, this final degree project tries to
provide the reader with a concrete vision of the most important elements of the NYPE 2015 and
to make a constructive and objective review of the pros and cons of its use. Finally, and from a
personal point of view, it is concluded that said charter party should be treated with caution due
to its complexity, and in which its users may it find more useful to use as an adaptable base to
their particular maritime businesses rather than a full and ready-to-use contract.
Key words: Maritime Law; Shipping Business; Charter party; Time Charter party; The New York
Produce Exchange; NYPE Charter party; BIMCO; ASBA, and SMF.
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Table of contents
ACKNOWLEDGMENTS I
RESUMEN III
ABSTRACT V
TABLE OF CONTENTS VII
FIGURES IX
TABLES XI
ABBREVIATIONS XIII
INTRODUCTION XV
CHAPTER ONE. THE ACTUAL MARITIME MARKET: A GENERAL OVERVIEW 15
1.1 INTRODUCTION 15
1.2 GLOBAL ECONOMY 15
1.3 DRY BULK MARKET 19
1.4 TANKER MARKET 23
1.5 CONTAINER MARKET 26
CHAPTER 2. CHARTER PARTIES: NATURE AND TYPES 31
2.1 WHAT ARE CHARTER PARTIES? 31
2.2 TYPES OF CHARTER PARTIES: METHODS OF CHARTERING A SHIP 32
2.2.1 VOYAGE CHARTER 33
2.2.2 CONTRACTS OF AFFREIGHTMENT 35
2.2.3 TIME CHARTERS 36
2.2.4 BAREBOAT CHARTERS 39
2.3 THE TERMS OF A CHARTER PARTY 40
2.3.1 CLASSIFICATION BY STAGE OF THE TERMS 40
2.3.1.1 THE MAIN TERMS 40
2.3.1.2 THE CHARTER PARTY TERMS 40
2.3.2 CLASSIFICATION BY EXPLICITLY OF THE TERMS 41
2.3.2.1 THE EXPRESS TERMS 41
2.3.2.2 THE IMPLIED TERMS 42
2.4 KEY TERMINOLOGY OF TIME CHARTER PARTIES 42
2.5 INTERNATIONAL ORGANIZATIONS 44
2.5.1 THE BIMCO 45
2.5.2 THE ASBA 46
2.5.3 THE SMF 46
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CHAPTER 3. THE NEW YORK PRODUCE EXCHANGE CHARTER PARTY 48
3.1 THE NEW YORK PRODUCE EXCHANGE: HISTORY AND PURPOSES 48
3.2 THE NYPE 1946 51
3.2.1 THE PREAMBLE 51
3.2.2 THE MAIN TERMS 53
3.2.3 CONCLUSIONS 57
3.3 THE NYPE 81 (ASBATIME) 59
3.3.1 THE PREAMBLE 60
3.3.2 THE MAIN TERMS 62
3.3.3 RIDER OF SUGGESTED ADDITIONAL CLAUSES 68
3.3.4 COMPARISON BETWEEN NYPE 46 AND ASBATIME 71
3.3.5 CONCLUSIONS 75
3.4 THE NYPE 93 76
3.4.1 THE PREAMBLE 77
3.4.2 THE MAIN TERMS 77
3.4.3 COMPARISON BETWEEN ASBATIME AND THE NYPE 93 90
3.4.4 CONCLUSIONS 98
CHAPTER 4. THE NYPE 2015 101
4.1 THE PREAMBLE 103
4.2 THE MAIN TERMS 103
4.3 APPENDIX A (VESSEL DESCRIPTION) 131
4.4 KEY FEATURES OF NYPE 2015 132
4.5 CONCLUSIONS 136
CONCLUSIONS AND FINAL ASSESSMENT 141
SOURCES 147
BIBLIOGRAPHY 147
PUBLICATIONS 148
ONLINE SOURCES 149
CASE LAW 151
ANNEX 1. THE NYPE 2015 SAMPLE FORM 153
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Figures
Figure 1. Distribution of international seaborne trade, 2014. 15
Figure 2. Rate freight developments between the years 2014 – 2016. 17
Figure 3. Real GDP growth rate by country group, year by year. 18
Figure 4. Dry bulk ship fleet growth for the years 2016 to 2022. 20
Figure 5. Global steel production from January to September, years 2019 and 2020. 22
Figure 6.US soya bean export rates from 2017 to 2020. 22
Figure 7. Crude oil tanker fleet growth from 2016 to 2022. 24
Figure 8. Global oil demand rates from 2019 to 2021. 25
Figure 9. Inactive container ships from January 2014 to July 2020. 27
Figure 10. Container ship fleet growth from 2016 to 2022. 29
Figure 11. BIMCO's logo. Source: BIMCO's website. 45
Figure 12. ASBA's logo. Source: ASBA's website. 46
Figure 13. SMF's logo. Source: SMF's website. 46
Figure 14. The New York Produce Exchange building. 48
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Tables
Table 1. Charter parties obligations and responsibilities distribution. 33
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Abbreviations
ACI Automated Commercial Information
AES Automated Export System
AMS Automated Manifest System
ASBA Association of Ship Brokers and Agents
BDI Baltic Dry Index
BIMCO Baltic and International Maritime Council
CoAs Contracts of Affreightment
COFR Certificates of Financial Responsibility
CSO Company Security Officer
CVE Communications, Victualling and Expenses
ECA Emission Control Area
FDP Final Degree Project
FONASBA Federation of National Associations of Ship Brokers and Agents
GDP Gross Domestic Product
HMM Hyundai Merchant Marine
ICB International Carrier Bond
IMDG International Maritime Dangerous Goods
IMF International Monetary Fund
IMSBC International Maritime Solid Bulk Cargoes.
ISM International Safety Management
ISPS International Ship and Port Facility Security Code
ISSC International Ship Security Certificate
ITC International Tonnage Certificate
MARPOL International Convention for the Prevention of Pollution of Ships
MEPC Marine Environment Protection Committee
MTSA Maritime Transportation Security Act
NAABSA Not Always Afloat But Safely Aground
NYPE New York Produce Exchange
OPEX Operational Expenditure
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PTO Port Terminal Operations
SCAC Standard Carrier Alpha Code
SCMA Singapore Chamber of Maritime Arbitration
SMA Society of Maritime Arbitrators
SOLAS Safety Of Life At Sea
STCW Standards for Training, Certification and Watchkeeping for Seafarers
UASC United Arab Shipping Companies
ULCS Ultra-Large Container Ship
USA United States of America
UTC Coordinated Universal Time
VLCC Very Large Crude Carrier
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Introduction
Nowadays, it is commonly said by almost all statistics of different international bodies and
organizations that approximately between 80% and 90% of the cargo that needs to be moved
from one place on Earth to another is transported by sea.
This data provides us a very clear scenario of the importance of shipping transport in global
economy as well as in people’s life quality by supplying them with anything they may need all
over the world. Some experts may have said that this massive cargo movement has created
some unnecessary need of certain products and some others have said that it is environmentally
unfeasible to maintain this cargo flow through our oceans. However, if there is something we
can be sure about (and gives us a huge basis to work within this paper) is that shipping business
is one of the main pillars of global economy.
Throughout my whole degree on Nautical Sciences and Maritime Transport, I have been able to
study many subjects directly related to vessels such as ship’s construction, celestial navigation,
bridge management... On the other side, I have also attended other subjects much more related
to shipping business as maritime law, international trades and economy (among others),
providing a wide range and complexity to the term “shipping business” and making it very
abstract. It was precisely from among these lasts subjects that I found what I was most
interested about and where I could professionally develop myself deeper.
Furthermore, I had the chance to work in two different companies like UASC and Hapag-Lloyd,
where I have acquired a solid knowledge about liner shipping from the position of maritime
agent in the PTO Department. There, I dealt directly with the port operations planning the works
that our own vessels had to develop in Barcelona’s port, as well as other agents’ vessels, like
loading and discharging of containerized cargo and also giving assistance to the Captain and the
crew onboard, arranging berth line and port stay, etc. But I realized we were not the Owners of
all vessels I had to work with. Thereby I discovered that all the companies that worked into the
different liner services shifted their vessels depending on their interests, but I was eager to know
how they carried out these exchanges.
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All this along with my interest in developing and explaining a topical and useful issue brought
me to discover the NYPE 2015 Clauses, choosing it as the mainstage of my project from the first
moment on.
Purposes and structure
The exposition of this paper will follow a very strict process that ensures an easy comprehension
and efficient follow-up of all the concepts in order to approach the main target, which could not
be any different from explaining the NYPE 2015 clauses.
Firstly, we will start by giving a general overview about the actual maritime market, explaining
its behavior and its possible evolution in the near future as well as in a long term mainly basing
on BIMCO Reflections of the lasts five years. These publications are still on top of the maritime
scenario year by year and provide the readers with an easy reading way, even though they are
not experts in the displayed topics.
Secondly, we shall define what charter parties are and how we can sort them out depending on
their contractual basis (as we will observe, they can be classified as time charter, voyage charter,
etc.). Once these concepts and classification are clear, we will mention and briefly describe the
different international entities that have historically been on top of the development of these
documents and have contributed to create this new version of NYPE.
Thirdly, we will explain the basis and history of NYPE charter party, investigating about the
reasons why it was created and taking a look at the consequences it had on the maritime trade.
Furthermore, we should widely describe all versions of this charter party, looking at the main
changes done in each one and the reasons why they were updated until reaching the main target
of this announce: the 2015 version.
Fourthly, and profoundly digging into the main chapter of this FDP, we may also explain the whole
NYPE 2015 version, developing all its different sections and clauses and mentioning all the
differences to the previous version as well as how it was developed and which organizations
made it possible.
Finally, in the last chapter, we will extract the main conclusions of this whole paper to have a
general overview of everything explained and we will try to foresee what is going to happen in
the near future regarding this charter party.
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To sum up, this FDP aims to take a step into the maritime charter business by analyzing the launch
of this new NYPE charter party version. Additionally, as this paper links the evolution of the
maritime market with the evolution of the NYPE charter party along the years since it was first
issued, it could also be profitable to try guessing whether the NYPE 2015 will experience a general
acceptation of the maritime industry or its publication will not hold a real impact in the chartering
business.
Limits to the scope of the paper
On one side, shipping business is simply an international trade and consequently must be this
paper. For that simple reason, it will be entirely written in English, trying to provide a maximum
scope.
On the other side, this FDP is not planned to be completely understood by all the audience since
a minimum maritime and economical culture is required. However, many people could, with a
little effort, be able to get the context of the paper and comprehend all things explained on it.
Therefore, we can define the scope of this FDP within the limits previously displayed.
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Chapter one. The actual maritime market: a general overview
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Chapter one. The actual maritime
market: a general overview
1.1 Introduction
As previously explained in the general introduction, we will here take a general glance at the
actual situation of the maritime market based on the last five years’ BIMCO’s Reflections – from
2016 to 2020, since the NYPE 2015 was launched. Since these publications are the most reliable
and effective of the actual maritime panorama, their explanation will provide us a clear overview
and baseline to understand the following chapters.
In order to achieve this required level of comprehension, I shall write this summary splitting the
maritime market into four different parts as follows: the global economy, the dry bulk transport,
the tanker trade and the container cargo. Every section will be explained from the year 2016 to
the 2018 so that the evolution and changes can easily be found, with a little conclusion at the
end of each one.
1.2 Global economy
Looking back at 2015, it is easy to remember that the global economy was not experiencing its
best stage. Although noticing growth of the level for GDP, it was less crescent than the previous
Figure 1. Distribution of international seaborne trade, 2014. Source: UNCTAD secretariat “REVIEW OF
MARITIME TRANSPORT 2015”, based on Clarksons Research, Seaborne Trade Monitor, 2(5), May 2015.
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five years due to some striver emerging markets and the staking out of the China’s economy’s
focus, so we can conclude that the 2015 never lifted off as it was expected to do, maintaining the
bad scenario of the year 2014. BIMCO also warned the whole shipping community on 2016 that
the year 2017 would be another challenging year although the International Monetary Fund
forecasted a several growth of GDP rates.
On one side, the main factor of this mistrustfulness is the China’s reappraisal of its growth and
direction looking towards the future. This unpredictability, always currently found within some
Chinese industries, could bring uncertainty on shipping demand.
On the other side, it is also very wise to say that this re-evaluation of China’s growth and direction
of its economy was with the intention of turning the investment practiced during the last years
into more consumerism, ruining its economic growth. Furthermore, the continuous seeking of
Europe and Japan to boost their economies and the combination between the low
unemployment rates and the high GDP growth in the USA, joining the previous China’s changes
commented, could gather momentum to a more solid level of growth in shipping demand.
In reference to pure economic terms of 2016, Europe slightly improved its growth while the US
and Japan were completely paralyzed, so there was no real development of shipping demand on
global scale, not providing any change for economic growth.
The reason why economy did not raise was that, due to the financial market crash in 2008, not
all the mishaps were dealt in a proper way during the eight years of endeavors and strains,
therefore more years of improvements will be needed to lift the global economy growth. The
main focus to recover this level of growth should be to raise the rates of fleet utilization, reducing
the overcapacity of the sector.
Governments tried to heal this by supporting the industries, but in fact, these direct grants had
negative results for they did not allow free trades and conditioned the market to high pressures,
which was not able to hold up.
Chapter one. The actual maritime market: a general overview
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Looking forward to the near future, it seemed almost impossible to discern if the GPD world
would grow or not because it depended on service sectors and emerging economies, both
providing a low GDP growth factor, resulting into a bass shipping level compared to the past.
Despite this, the shipping community always trusted that raw materials, energy and
manufacturing facilities would be helpful for the global developing, being China the main actor
of this reliance, something never very encouraging due to its volubility.
2017 was the first year of improvement after the low results on shipping trade experienced on
the past years since economic growth raised in Europe, Asia and America, expecting an upgrowth
of the 0,1% of the GDP growth rate. Despite that optimism, a careful forecast for 2018 had to be
taken into account still due to the fickleness of the shipping industry.
As it could not be in any other way, China is still the center of all shipping business. Although it is
the top driver of dry bulk shipping demand growth, it is also becoming one of the main exporter
of containerized cargo because of the introduction of robotics in the manufacturing sector. In
addition, China has also raised its level of oil import during 2017, becoming stronger in another
different market sector.
Figure 2. Rate freight developments between the years 2014 - 2016. Source: The Baltic and
International Maritime Council. The shipping market in 2015 and looking forward. BIMCO
Reflections 2016
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Regarding global economy terms, as long as the GDP growth rates seem to keep constant until
2022 the world trade volume growth rates are expected to lower (from 4.2% to 4.0%) so no big
changes will take place in only one year. The key to turn the situation around is to realize that as
the demand levels are not going to grow, the fleet should not be raised but adapted to this
smaller demand level in order to equate these both concepts.
Another revelation is made in 2019 Reflections, since according to the IMF the emerging
developing countries will be the ones experiencing the major growth and also balancing the
stacked downward trend suffered since the 2000 year of the advanced economies. Furthermore,
the ghost of the trade war between the USA and China as well as many other geo-political
obstacles must be considered as important facts that will, in a different way depending on the
sector, affect the global shipping industry.
Figure 3. Real GDP growth rate by country group, year by year. Source: The Baltic and International
Maritime Council. Global shipping scouts for future growth. BIMCO Reflections 2019.
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Regarding the aforementioned trade war, even though a phase 1 deal was achieved in December
2019, far more difficult agreements are yet pending to be reached by the USA and China in 2020,
in which the additional levies imposed to the EU and the trade tensions between Japan and South
Korea might be added.
However, more bad news were waiting to surprise the shipping business at the start of this
decade. Firstly, the slowing motion of the globalization and the raise of the protectionist
measures all over the world have turned out to develop into a drop of the trade-to-GDP.
Secondly, the balance between the supply and demand of ships was not reset to zero by the start
of 2020, contrary to the recommendations of BIMCO, worsening any provision for the
shipowners, who also had to deal with the compliance of the IMO 2020 Sulphur Cap.
To conclude, only good market conditions can improve freight rates, which will be the only
weapons in which the shipowners can lean on.
1.3 Dry bulk market
Although the level of iron remained as it was on 2014 and Chinas’ steel export reached its
maximum level, nothing offset the huge decrease of the coal import in China, so 2015 was
generally a very problematic year for dry bulk. The only opportunity to reach that market
recovery, as per BIMCO’s forecast, was to raise the level of Chinese steel mills.
There were two facts that made markedly evident this fearful first half of 2015: the lowest level
ever affected the Baltic Dry Index (hitting 498) and that the majority the companies suffered
financial losses since their vessels worked below OPEX levels. Because of these low levels in the
first half of 2015, the scrapping market attained a new record making the fleet growth reach the
twelve-year lowest level. It is also worth to say that the freight market improved a bit during the
last four months of 2015 so the scrapping market was diminished.
For 2016, BIMCO forecasted that the supply-side was going to grow 2% owing to scrapping, which
could reach a new record level. On the other side, demand level was not expected to grow since
some challenging market conditions in China were going to bring risk on inversions in dry bulk
market.
Although BIMCO predicted that 2016 would be a terrible year for the dry bulk shipping business,
no one could have ever imagined that it would be such a dilapidating year.
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The main fact for all this was the lowest level of BDI ever got on 10 February: 290. Even though
it improved until its highest point of 1261 in November (mainly due to the transport of iron to
China on Capesize vessels), the situation could not be totally countered. Fortunately, the
production of steel mills grew and coal mines reduced their operational days so much more
mineral and coal were needed and raised the demand side.
To redress this horrible situation, a level of scrapping of around 30 million DWT was needed to
obtain a zero-fleet growth. In order to gain it, BIMCO provided a market analysis called “Road to
recovery” for dry bulk, passing some useful information to shipowners about what to do and how
to act to return to profitability in 2019. Even that, BIMCO expected the supply-side to grow 1.6%
in 2017.
Figure 4. Dry bulk ship fleet growth for the years 2016 to 2022. Legend: A is Actual; F is Forecast; E is
Estimated. Source: BIMCO. Market Analysis. Dry bulk shipping: China remains the driving factor, but coal
policy is disrupting the market.
Chapter one. The actual maritime market: a general overview
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Surprisingly, 2017 was a year of great improvements for the dry bulk market: on one hand,
Chinese demand grew above all expectations raising the global demand level up to a 5%, and on
the other, the fleet growth had a rate of 3.2%, which was lower than expected. As the whole
world usually maintains the level of dry bulk import, China becomes even more important for
example for iron imports, which grew up to a 7% on 2017.
Due to all these good events, BIMCO published the third update of “Road to recovery”,
announcing that 2018 would be the first year of profit since 2011. There was also highlighted that
shipowners had the most important role in their hands since it was fundamental that the fleet
growth did not overcome the 1%. If that condition took place, the dry bulk market would keep
improving slowly.
Nonetheless, the development during 2018 was slightly different than expected basically due to
two reasons. Firstly, Chinese steel mills’ seaborne import levels were lower than on previous
years during the first 10 months and its imported cargo heavily shifted from iron ore towards
scrap metal, threatening Capesize market.
Secondly, the outlook of 2019’s market was clearly under China’s hands – and influenced by the
USA as well – due to the trade war that both countries were carrying out between each other, in
which the Panamax and Handymax sectors are closely linked, being the soya bean exports taking
a leading role.
Further to the first reason, the trend on 2020 about the fall of iron ores for a third year in a row
was still a major concern for Capesize trade due to the change in China’s steel production. In
addition, soya beans imports to China played a major role on dry bulk shipping, therefore the
largest-ever culling of pigs – the main consumers of soya beans – will seriously lower its demand.
Finally, more pressure on the freight market will be put due to the widener of the gap between
the supply and demand of ships – a fleet growth of 4.1% was registered on 2019, being it too
high to compensate the abovesaid fall of the demand, concluding in an inexistent balancing of
the fundamental market
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Figure 6.US soya bean export rates from 2017 to 2020. Source: BIMCO. Market Analysis. Dry bulk
shipping: China remains the driving factor, but coal policy is disrupting the market.
Figure 5. Global steel production from January to September, years 2019 and 2020. Source:
BIMCO. Market Analysis. Dry bulk shipping: China remains the driving factor, but coal policy
is disrupting the market.
Chapter one. The actual maritime market: a general overview
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1.4 Tanker market
Tanker market is divided into two enormous groups: crude oil and oil products. They both took
profit from a very strong freight market during the whole 2015 supported by two main factors:
the drop of the oil prices that started in the medium of 2014 and the low growth of the supply
side throughout 2015. That year was definitely the best year for all oil tankers since the market
suffered the big crash in 2008 - even though it is still not fully recovered. Furthermore, we can
ascertain that the level of demand was regularly high during the whole 2015 since refinery could
work with strong margins, even taking pauses for its maintenance.
Looking forward on 2016, BIMCO generally expected that the building of oil stocks that took place
in 2015 would slow the growth of tanker demand on 2016, something we will check when
analyzing the following years in this chapter. Another expectation from BIMCO to happen on
2016 was the reappearance of Iran in the crude oil export market in order to halt the current
trade patterns, bringing more competitiveness in supply terms. It could maybe develop a higher
tanker demand, but it was not very trustable to happen.
Nothing different from what BIMCO predicted, 2016 was not as good as the previous year for the
oil industry. The fleet grew by 6% in all tanker segments, decompensating the market since the
demand level was by no means raised even with the strong freight market in 2015 due to the low
supply side growth and the major demand of oil by refineries as a result of their increased yield.
As also told in 2015, Iran appeared back to the tanker market, making the global oil supply to
keep on ascending. Despite that, the West African exporters remained the strongest icon in the
market, and the tanker demand growth for 2017 was prevised to come mainly from China and
India.
BIMCO also expected both nets of fleet and supply side to grow between 2,5% and 3% in 2017,
much less than the previous years, and demolition of these vessels was expected to reach a five-
year high. However, these improvements were not going to be enough to bring the freight
market to the desired level. Thus, BIMCO planned to keep on developing its analysis known as
“Road to Recovery”, which handed the clues to raise the bulk sector to its best possible level.
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Although some experts thought (wrongly, of course) that the oil markets would be fully
recovered from one day to another and they suggested all tanker Owners not to demolish their
vessels, the slow reduction of global crude oil and oil product stocks was a ballast on tanker
demand during the whole 2017. Until those global stocks are massively decreased, there would
not be any interest in sea oil trading.
The fact that BIMCO Reflections 2019 started with the sentence “2018 has been a horrific year”
is pretty illuminating. As per 2018 market characteristics, it shews that lower earnings had been
achieved whether the ships were larger, evidencing its bad fundamental market balance. Thus,
the US sanctions in Iran would be everything but any help to improve this situation.
Figure 7. Crude oil tanker fleet growth from 2016 to 2022. A is Actual; F is Forecasted; E is Estimated.
Source: BIMCO. Market analysis. Tanker shipping: worst not yet over as industry pays for strong second
quarter.
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On the other side, a low fleet growth of crude-oil tankers in 2018 could balance the weak demand
side – helped with a massive demolition activity, even though the fleet growth of 5-6% from the
last two years was difficult to overcome. Due to this fact, earnings could look slightly improved
at the beginning of 2019, which mean that less ships would be sold for scraping, making fleet
expected to grow around a 2%. However, crude-oil tankers could see their market improved
thanks to new refineries demand in China and US exports.
Regarding oil-product tankers, a low fleet growth remarkably improved the market to face 2019
compared with the lows of 2018. One of its mains boosters would be the distribution of the IMO-
2020 compliant fuels – it would depend on the availability and production of fuels from the global
refineries.
One year later, the top results of crude-oil tankers due to geopolitical developments and the
record levels of freight rates surprised the whole tanker market. However, due to the worseness
of the market fundamentals in 2019 – with an eight-year-high fleet growth of 6.3% - and its
provisions to be unchanged in 2020, these high freight rates in VLCC market were most likely to
disappear after the first quarter of 2020.
Figure 8. Global oil demand rates from 2019 to 2021. F is Forecasted. Source: BIMCO. Market analysis.
Tanker shipping: worst not yet over as industry pays for strong second quarter.
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Due to the expectation of achieving high benefits due to the IMO 2020 Sulphur Cap complying
fuels transport from refineries to bunker spots, oil-product tanker industry experienced a high
fleet growth in 2019. Even though this boost would improve the earnings during the first half of
the 2020, this fleet growth would result in an over-supplied market.
However, the US was expected to become an annual net exporter of crude oil, giving a huge
improvement to the tanker industry market thanks to the long sailing distances to where the
major importers are located – the Far East.
1.5 Container market
Due to the volume growth of the Asia to Europe trading lane in the past years, a very high ship
capacity was forecasted to be needed in the near future, so more than 900.000 TEUS were
delivered during 2015, hitting a four-year high supply-side growth rate. On the other side of the
scale, no one predicted that European demand rate was going to fall to a three-year low rate, so
the combination of these two facts unbalanced the market to an unexpected level. The clue to
restore the market balance was clearly to raise the European imports of containerized goods,
and the way to get that was for the Euro to strengthen against the Renminbi, since it would mean
lower prices for European importers.
This increase of the demand-side was very difficult to manage, ships of all sizes were removed
from over-supplied trading lanes in November 2015, leaving 1.2 million of TEUS idled, reaching a
five-year high. However, this was again not sufficient to counter the drop in demand. Albeit the
record for new capacity achieved in 2015, the following year was predicted to obtain a lower
influx around a 3.5%. In any case, this will not assure container shipping turning back to a
balanced market conditions since its injury was quite digressive.
2016 could simply not have a good start with the conditions coming from 2015, becoming very
urgent to readjust the supply-side to the global demand. To each that, there were not many ways
left since some of them, as slow steaming or idling, were already used. However, there were
other kind of non-operational tools that might have been forgotten such as limiting new orders,
consolidation and scrapping.
Chapter one. The actual maritime market: a general overview
27
Figure 9. Inactive container ships from January 2014 to July 2020. Source: BIMCO. Market Analysis.
Container shipping: a surprisingly profitable year during challenging times, but how long can it last?
In terms of consolidation, larger alliances had been created during 2016 (as UASC and Hapag-
Lloyd merge, where I found myself involved in), which had been able to cut cost and offer lower
freights. Regarding the other two topics, newbuilding rates were very low whereas there was an
all-time high of demolition, leaving the Panamax size ships out of fashion and facing a wider space
between feeders and very large ships. By using these three concepts, market conditions
improved considerably in 2016 since the demand growth was higher than fleet growth for the
first time since 2010.
Looking forward to 2017, BIMCO expected a net fleet growth between 3,1% and 3,4%, which
would neither improve nor worsen market conditions in 2017 but maintain them equal. Overall,
we can say that it was a much better year for container shipping than 2016 and obviously 2015:
freights increased, and idle fleet was again useful. The fundamental market was rebalanced
during 2016 since the demand growth rate raised to a +5% (the highest in six years) and there
were low fleet growth rates. However, this balancing was slowed down during 2017 due to the
reactivation of idle fleet, which increased the available TEUS in a 3.3%.
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In September 2017, new twenty ships of 22.000 TEUS were ordered with a delivery date between
2019 and 2020, increasing the fleet rate for around 4% in the following years and reducing the
opportunity for fundamental market balance improvement. To fight against this fleet growth,
exercises like reducing costs and slow steaming must be kept on used, handing more operational
efficiency. There was also a great hope in some of the most necessary economies of scale for the
industry (like Asian market) to provide a positive demand growth (between 4-5%) making the
shipping industry more profitable.
Although having shiny moments, 2018 was definitely not a good year for container shipping
market. Even though the inbound-loaded container imports on the US east coast reached an
increment of the 8%, the development of fleet growth totally killed any rise for containerized
cargo market since almost no demolition took place, becoming a 10-year low.
Therefore, it was not strange to conclude that the aforementioned fleet growth was going to be
the centerpiece that would lead the development of the market fundamentals, where not only
new-buildings were present but also the 700.000 TEU idled must have been taken into
consideration – which were going to be reactivated as soon as freight rates rose.
On demand side, more difficulties for its development were found. Firstly, the volume on long-
distance trading lanes would be most likely compensated with the idled TEUS. Secondly, if the
transpacific tariff walls were maintained, the intra-Asian trades would be seriously affected – we
must not forget that this is the region where most containers are moved annually. Finally, to
achieve a prosperous container market on 2019, the advanced economies’ GDP growth and
China’s subsidy would be the main clues.
Taking one step forward to the next and last Reflection, we can find that 2019 was a worrying
and off-balanced year for container shipping. By the first nine months of the year, the global
demand grew just 1% whereas the fleet grew around a 3.7%. Furthermore, the intra-Asian trades,
which we mentioned before to be one of the hopes for the future of this market, remained plain
during 2019, meaning that they did not help in any way.
Chapter one. The actual maritime market: a general overview
29
Figure 10. Container ship fleet growth from 2016 to 2022. A is Actual; F is Forecasted; E is Estimated.
Source: BIMCO. Market Analysis. Container shipping: a surprisingly profitable year during challenging
times, but how long can it last?
Additionally, some ULCS are to be delivered during 2020 (as the ordered by HMM), producing
the cascade effect for which other smaller vessels are going to be moved to another routes; the
problem about this effect is that those vessels are going to be too big for the services where they
will be moved to, falling into pressures to freight rates.
Taking a look into the future, BIMCO finds easy where to point at: only rolling the protectionist
measures – mainly imposed by the trade war between the US and the Asian countries of the
other side of the Pacific - and freeing the trade will be possible to let it develop at its natural pace
and heal the trade multiplier index.
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Chapter 2. Charter parties: nature and types
31
Chapter 2. Charter parties: nature
and types
After the general overview of the maritime market explained in the Chapter 1, we will follow with
this FDP by defining what charter parties are, their scope within the maritime business and some
other aspects about them, such as the different types existing, the different classifications of
their terms and the international organizations that have historically developed them.
2.1 What are charter parties?
The nature of the maritime business is, by all means, transporting cargo from one place to
another by water. We may find this concept a bit obvious, but only keeping it in mind can provide
us an idea of its depth and complexity since it involves many different relationships between
many actors, with uncountable contracts among them.
One of these relationships is the one that embraces the Owner of the cargo and the Owner of
the ship that will transport said cargo – it is actually the most important for us within this
coursework. When there is an agreement between a cargo Owner and a buyer, it depends upon
many factors like the demand and supply of ships and cargo at that moment (as explained in the
previous chapter), the nature of the deal or the cargo involved, a suitable and in the right position
vessel should be employed to perform this transport – a job that will be arranged by the cargo
Owners through their brokers. This contract between the cargo Owners (Charterers from now
on) and the shipowners is named “charter party”, where both parties shall agree all details of the
sea transport of the cargo. Albeit under English law there is no requirement that a contract for
the services of a ship should be of any particular manner, it is normally embodied in - or based
on - a printed form of charter party1.
1 Lidgett v. Williams (1845) 4 Harc 456,462; The Epsilon Rosa [2002] 2 Lloyd’s Rep. 81, 86.
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The reason why charter parties have experienced this standardization process is that it would be
too time-consuming and expensive to design a new contract every time a vessel is chartered, and
besides saving time and money, these standard forms of charter parties provide a very wide cover
of any unforeseen event during the duration of the contract. After centuries of shipping business,
it is well known that both uncertainty and improvisation play important roles in it, therefore
charter parties must ensure that all details and possible issues are totally previewed at their
maximum level providing liabilities to both parties.
Some of these standard forms have been issued by individual companies to protect their interest
and make businesses easier for their customers, such as Repsol or Shell. However, some
international organizations have also published other forms to help the shipping community and
improve all chartering processes, providing the most complete, used and impartial charter
parties to the industry. These organizations shall be widely explained into the following chapter,
but the most important ones are BIMCO, the ASBA and the SMF.
To sum up, charter parties can be defined as the proof of the conclusion of a fixture, for a specific
voyage or period of time, becoming the legal link between two contractual parties and requiring
the fulfilment of the mutually agreed terms, conditions and exceptions under the law in force.2
2.2 Types of charter parties: methods of chartering a ship
Once having an agreement between the cargo holder and the shipowner, they will both have to
choose the most suitable method to proceed with the chartering among the following ones3
• Voyage Charter;
• Contracts of affreightment (CoAs);
• Time Charter;
• Bareboat Charter (or Demise).
2 Tsoudis, George N. The shipbroker’s working knowledge. 1st Edition. St Peters Vicarage, Wightman Road, London N8 0LY, UK, 2015. ISBN: 978-1-910714-09-6. 3 See The Tichy ][1999] 2 Lloyd’s Rep. 11 and The Tichy (No. 2) [2001] Lloyd’s Rep. 10, reversed [2001] 2 Lloyd’s Rep. 403.
Chapter 2. Charter parties: nature and types
33
In the following sub-sections, the differences and particularities of the aforementioned methods
of chartering a vessel will be explained, mentioning also the most current cases they are used to.
2.2.1 Voyage Charter
Voyage charters are those by which the Owners perform one or more designated voyages from
a load port to a discharge port in return of a payment of freight, generally calculated per metric
ton or cubic meter, depending on the nature of the cargo, transported. This kind of method also
allows to hire only a part of the vessel’s total capacity - most commonly known as “slot charter”
inside this category.
Table 1. Charter parties obligations and responsibilities distribution. Source:
Stopford, M. Maritime Economics.
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Regarding the responsibilities of the parties, the voyage charter sets most of them to the Owners;
therefore, all nautical and operating management, including capital, operating, port and bunkers
costs are on behalf of the Owners. Thus, the Owners are in charge of place a seaworthy4 vessel
in the identified by name port or range of load, loading the cargo and take reasonable care of it,
carry the intended voyage out with due despatch and deliver the cargo at the identified by name
port or range of discharge at the date agreed to the consignee - or its designated person.
On the other side, the Charterers are simply Owners of a cargo that needs to be shipped from
one port to another but do not have any responsibility nor bear the costs of such transport;
consequently, they are responsible to place the cargo agreed at the loading port at due date in
sound condition and to pay the hire - among other minor responsibilities which are detailed in
the charter party.
This contract implies a couple of concepts that are worth to be briefly mentioned: laytime and
demurrage. The laytime is the time agreed between the parties to carry out all loading and
discharge operations at port or region - further details of the exact place are to be made present
in the charter party. When these operations are carried out faster than the agreed time, then
Charterers may claim “despatch” to the Owners. Contrary to the previous explanation, when port
operations are made slower than expected, then Owners are able to claim to the Charterers a
“demurrage” as a penalty for the extension of the intended duration of the trip, which is usually
calculated by a lumpsum of money per day of demurrage.
The voyage charter is both the simplest and most used form in the ship chartering business due
to many reasons. Firstly, it has been mentioned the low responsibilities that the Charterers
assume when using a voyage charter, making it perfect for those cargo Owners who hold no
knowledge of maritime transport and its many legal issues that can arise during its performance.
As it has been previously explained, the nautical management of the vessel is an Owners’
responsibility, therefore the Master will receive trading instructions by the Owners and not by
the Charterers.
4 See NYPE 2015 Clause 2 (b). Delivery. NYPE 2015 sample copy available at: https://www.bimco.org/contracts-and-clauses/bimco-contracts/nype-2015
Chapter 2. Charter parties: nature and types
35
Secondly, this kind of form is used by Charterers when the freight market provides high freight
rates but it is expected to evolve to lower rates; even though the Charterers may have an
important quantity of cargo to ship to their consignees at the port of destination, they may prefer
to use voyage charters until the freight market goes downwards.
To conclude, another economic reason to use this form is when the future demand5 of the
commodities to ship becomes unstable and the Charterers have no certainty of the concurrence
of the trade.
2.2.2 Contracts of Affreightment
Contracts of Affreightment (also called “tonnage contracts”) are agreements that implicate
multiple voyage charters joined together in one single contract where the Owners are to carry a
specific amount of cargo (usually described in tons) during a period of time, in several voyages
and for a fixed price per ton. However, there are many different categories where voyage
charters for more than one voyage can be sorted out, such as “consecutive voyage charters”6 and
“intermittent voyage charters”7.
Regarding the duties and the responsibilities of each party, they are exactly the same as in the
voyage charters - we must remember that CoAs are only a succession of voyage charters.
However, there are some elements that need to be introduced due to the nature of the contract
itself, such as the period of validity of the contract, the total amount of the cargo to be carried
and the vessels that will participate to perform the transport of the goods, usually described in
the contract providing their main characteristics such as their measures, capacity, class, age, etc.
It is also worth to explain that, even though a general amount of cargo to be shipped is indicated
in the contract, not every voyage is planned to carry the same amount of cargo. In order to deal
with this, Owners may have a choice of the quantity of cargo loaded at every vessel within a given
range of maximum and minimum amounts.
5 Alderton, P.M. and Rowlison. Grammenos, C. Th. “The Handbook of Maritime Economics and Business”. 2nd Edition. London: Lloyd’s List, 2010. 6 E.g., Ambatielos v. Grace Bros. (1922) 13 Ll. L. Rep. 227; Suisse Atlantique v. Rotterdamsche Kolen Centrale [1967] 1 A.C. 361. 7 E.G., The Oakworth [1975] 1 Lloyd’s Rep. 581.
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CoAs are usually employed in bulk trades like coal, potash, iron ore, sodium chlorides or many
other industrial trades. The main advantages for Charterers are that they ensure that the
transport of the trade will be covered until stocks are over and to keep lower hires in case the
markets experiences a raise of freight rates. Regarding the Owners, this kind of contract allows
them to optimize their fleet and perform an efficient management of the ships.8 In addition, it
also permits the Owners to keep high hires in case the freight market falls.
The two most used standard CoAs used nowadays in shipping business are the GENCOA,
published by BIMCO, and the INTERCOA 80, which is specific for tanker vessels and which was
published by the INTERTANKO and then adopted by BIMCO. Nevertheless, even though it is
common for single voyage charter forms to be adapted to multiple voyage contracts, this
adjustment can bring many complications in terms of cancellation, liens and the effect of the
Hague Rules - when incorporated.
2.2.3 Time Charters
Time Charters are those contracts under which the vessel’s employment is put under the
legitimate orders of the Charterers, having the right to utilize cargo spaces to carry any type and
quantity of goods permitted in the contract, while possession remains with the Owners, who
provide the crew and pay the ordinary costs of the ship. For that orders, Charterers are to pay an
agreed periodical hire and assume specific costs such as the fuel, port charges and cargo handling
operations. This is the nature of the NYPE charter party, hence a deeper explanation of this kind
of contract will be made in this sub-section by introducing other historical definitions .
The first one, provided by Donaldson, J., States that “under a time charter party (…) the shipowner
undertakes to make the vessel available to the Charterer for the purposes of undertaking ballast
and loaded voyages as required by the Charterer within a specified area over a stated period”.9
Similarly, Lord Diplock explained that “A time charter (…) is a contract for services to be rendered
to the Charterer by the shipowner through the use of the vessel by the shipowner’s own servants,
8 Stopford, Martin. Maritime Economics. 3rd Edition. Abingon, Oxon: Routledge, 2009. ISBN 0-203-89174-0. Page
183. 9 Donaldson, J., The Berge Tasta [1975] 1 Lloyd’s Rep. 422, page 424.
Chapter 2. Charter parties: nature and types
37
the Master and the crew, acting in accordance with such directions as to the cargoes to be loaded
and the voyages to be undertaken as by the terms of the charter party the Charterer is entitled to
give to them”.10
In addition, Diplock, J., pointed out that “A time charter is not a lease (…), the Charterers do not
acquire possession of the ship or any other right of property in her; they acquire, rather, the right,
within the limits set by the charter, to direct the use to which the Owners put their ship.”11, whilst
Lord Reid detailed that “ under a time charter there is no hiring in the true sense (…) the chartered
vessel remains in the possession of the Owners, and the master and crew remain the Owners’
servants. What the Charterer gets is a right to have the use of the vessel.”.12
In contrast with the Voyage Charters explained in the previous sub-section, Lord Hobhouse
explained that the Owner who fixes her vessel on voyage charters, “is using the vessel to trade
for his own account. He decides and controls how he will exploit the earning capacity of the vessel,
what trades he will complete in, what cargoes he will carry. He bears the full commercial risk and
expense and enjoys the full benefit of the earning of the vessel”13.
The main obligations of the Owners in Time Charters are to provide an accurate and true
description of the vessel that will be employed, with all valid and up-to-date certificates on board,
being her seaworthy at the commencement of the contract and throughout its duration and
deliver her at the agreed time and place to the Charterers. In addition, Owners do also promise
that the vessel will comply with due diligence with Charterers orders, co-operation with them in
loading and unloading cargoes and keeping her fit for services and duly supplied - nevertheless,
bunkers are not included.
On the other side, the main obligations of the Charterers are, first, to make punctual payment of
the hire from the time of delivery to redelivery. Moreover, the employment of the vessel shall be
made within the agreed trading limits, in safe places and not loading any cargo excluded in the
10 Lord Diplock, J., The Scraptrade [1983] 2 Lloyd’s Rep. 253, pages 256-257. 11 Lord Diplock, J.,Port Line v. Ben Line [1958] 1 Lloyd’s Rep. 290, page 299. 12 Lord Reid, The London Explorer [1971] 1 Lloyd’s Rep. 523, page 256. 13 Lord Hobhouse, The Hill Harmony [2001] 1 Lloyd’s Rep. 147, page 156.
THE NYPE 2015 TIME CHARTER PARTY
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contract. Furthermore, Charterers are to maintain the vessel duly supplied with bunkers and to
bear port charges and loading and unloading costs of the cargo. To conclude, they must also
redeliver the vessel at the fixed redelivery date and place, indemnifying the Owners against any
loss suffered whilst complying with their employment orders.
As it can be outlined from the previous paragraphs, Time Charter contracts are much more
complex than Voyage Charters, and special attention shall be paid to certain terms such as
delivery, redelivery, trading limits, hire payment dates and off-hire period - which can even imply
the withdrawal of the vessel14, cargo exclusions, etc. Due to this complexity, and even though
there is no legitimate law that sets any obligation, standard forms are very often used.
Nowadays, there exist many standard forms for all kind of Time Charter trades, such as
INTERTANKTIME 80 for tankers15, they SUPPLYTIME for offshore supply vessels or the
BIMCHEMTIME 2005 for liquid chemical tankers. However, there are some large and somehow
famous companies that, due to the volume of their trades, incorporate their own forms as Shell,
by using their SHELLTIME 4, Exxon by using their EXXONMOBILE TIME 2005 or BP with their
BPTIME 3. Nevertheless, the most commonly form used for Time Charter trades, together with
the BALTIME, is the NYPE charter party form, which latest 2015 revision constitutes the basis of
this FDP.
To conclude with the explanation of Time Charters, it might be worth to explain that this type of
contracts allows Owners to secure future income by having their vessels employed during large
periods of time. On the other side, Time Charters might also be useful for companies that need
to increase their capacity volume during a certain period of time but do not want to take the risk
of buying a brand-new or second-hand vessel due to the uncertainty of the trade in long term
future.
14 See NYPE 2015 Clause 11. Hire Payment, section (b) Withdrawal. NYPE 2015 sample copy available at: https://www.bimco.org/contracts-and-clauses/bimco-contracts/nype-2015 15 Issued by joint collaboration of BIMCO and INTERTANKO.
Chapter 2. Charter parties: nature and types
39
2.2.4 Bareboat Charters
Bareboat Charters, also known as “Demise”, are the last method of chartering a ship that will be
explained in this FDP. In these contracts the possession of the vessel is fully given to the
Charterers, who provide crew, pay all running costs, undertake the title of shipowner to any
further Charterer and bear the costs to supply her with all necessary.
To extend this definition, the UNCCRS stated that a bareboat charter “means a contract for the
lease of a ship, for a stipulated period of time, by virtue of which the lessee has a complete
possession and control of the ship, including the right to appoint the master and crew of the ship,
for the duration of the lease”.16 In contrast with Time Charters, Mackinnon, L.J. stated that their
difference was like the difference between “hiring a boat in which to row yourself about, in which
case the boat is handed over to you, and contracting a man on the beach that he shall take you
for a row, in which case he merely renders services to you in rowing you about”.17
Thus, it results very easy to define the obligations of the Charterers during a Bareboat Charter,
which are to pay an agreed hire rate, exercise the nautical and operating management and
maintenance of the ship and provide her crew, stores, supplies, fuels, etc. In addition, they are
also to comply safety and health standards and regulations as well as assume the costs of P&I
and insurances. Furthermore, the Charterers are also responsible to redeliver the vessel in the
same conditions of delivery, even though many Bareboat Charters frequently include a purchase
option at the end of the contract. By other words, Owners only undertake the responsibility of
paying the capitals costs of the vessel.
The main use of Demise Charters is the financing of new-build ships by financial organizations,
such as investment institutions or banks, through tools as Tax lease. In this case, these
organizations use to have no maritime business’ goals, therefore no other purposes than
investment are searched by them, eluding any shipping binding with the Ship through the use of
Bareboat Charters.
16 United Nations Secretariat. United Nations Convention on Conditions for Registration of Ships. Geneve, February 7th, 1986. Article 2. 17 Mackinnon, L.J., Sea & Land Securities v. Dickinson (1942) 72 Ll.L.Rep. 159, page 163.
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2.3 The terms of a charter party
Once the parties have agreed to work as per one of the three aforementioned methods, firm
negotiations shall be carried out fixing as much details as possible of the deal18. Even though
experts have performed many different classifications of the terms of charter parties, here will
be explained the two most widely used sorting.
2.3.1 Classification by stage of the terms
The first classification that will be explained in this paper is depending on the stage the terms are
agreed, being sorted out into “Main Terms” and “Charter party Terms”.
2.3.1.1 The Main Terms
These terms are those basic agreements between the parties before continuing to more specific
terms as the charter party terms. Even though there are no standard forms, these agreed
concepts are to define the peculiarities and the needs of the trade itself, being sometimes
modified or updated with the arbitration for additional protection for the parties.
Parallel to the previous explanation, these terms are usually formed from an initial offer set by
the Owners, having the Charterers a specified period of time to accept it or perform a counter-
offer by amending the terms where they do not agree. This process is repeated once and again
until a general agreement is achieved, and the parties can proceed to perform written contract.
2.3.1.2 The Charter party Terms
Once the previously explained Main Terms have been agreed and depending of the type of
contract the parties plan to set, a charter party proforma is usually chosen and fulfilled by the
parties, paying attention to the content of the clauses and adding those considered necessary to
protect their interests - with the consequent negotiations.
18 Tsoudis, George N. The shipbroker’s working knowledge. 1st Edition. St Peters Vicarage, Wightman Road, London N8 0LY, UK, 2015. ISBN: 978-1-910714-09-6.
Chapter 2. Charter parties: nature and types
41
Every charter party is divided into two parts:
The main body: it is the standard wording issued by a shipping organization or particular
company, which limits the obligations and responsibilities of each party. Nevertheless, they are
all negotiable, being able to be amended or deleted as the parties wish and agree.
Rider or additional clauses: these clauses cover omissions to the main body or regulate certain
aspects not recognized in the proforma contract, most likely to allocate liabilities and
responsibilities for specific risks. It must be considered that these additional clauses are usually
self-written by the interested party, therefore their addition shall be made very carefully trying
to make each case “crystal clear”19.
2.3.2 Classification by explicitly of the terms
The terms of a charter party can also be classified by their level of explicitly, dividing them into
“Express Terms” and “Implied Terms”.
2.3.2.1 The Express Terms
These terms are those which have been expressly agreed upon the parties, both orally or in
writing in a signed document, and which are regarded as a contractual term binding the parties
- not merely representations. Furthermore, a charter party is presumed, as any contract, to
contain all the express terms wished by the parties, therefore any term not included must first
rebut its presumption such as a collateral contract or warranty20.
Charter parties are to be interpreted to ascertain and give effect of the intention of the parties
in an objective manner, extracted from the ordinary and natural meaning of the wording of the
words used in the business context21 of the contract and its external evidence rather than any
technical sense22.
19 Tsoudis, George N. The shipbroker’s working knowledge. 1st Edition. St Peters Vicarage, Wightman Road, London N8 0LY, UK, 2015. ISBN: 978-1-910714-09-6. 20 See Heilbut. Symons v. Buckleton [1913] A.C. 30; De Lasalle v. Guildford [1901] 2 K.B. 215. 21 See Reardon Smith v. Hansen Tangen [1976] 2 Lloyd’s Rep. 621, 625, per Lord Wilberforce. 22 See Sailing Ship Garston v. Hickie (1885) 15 Q.B.D. 580 and The Aragorn [1977] 1 Lloyd’s Rep. 343.
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Nevertheless, as stated by Lord Hoffmann “The charter party must be construed as a whole”23,
depending all words and phrases upon their context to really understand their meaning and not
to be construed in a vacuum.
2.3.2.2 The Implied Terms
The Implied Terms of a charter party are these that, even though they are not written in the
contract and do not form part of the wording of the clauses, arise among the Express Terms to
provide business efficacy to the agreement. These terms have their function when the contract
leads to absurd consequences or do simply not work unless the term is implied. The process
whereby a term is implied is an exercise in the construction of the contract as a whole24.
However, courts have long stated that they will not be over-ready to imply terms or to make
presumptions about the intention of the parties.25
2.4 Key terminology of time charter parties
Before analyzing any charter party form, it shall be useful to define some key words that are
almost always found in the contracts to set a basic and solid knowledge that may help any reader
to reach a deeper understanding of the contracts. Even though many words could be highlighted
in this sub-section, a selection of a few has been made as follows:
The parties
Every contract is set between two parties: the Owners and the Charterers. A clear identification
is usually made right at the beginning of the form - in the preamble.
The Ship
One of the basic objects of the contract is the vessel that will be employed to carry the cargo
overseas. For that, not only the name of the vessel is provided in the form, but a brief description
and her characteristics is included – sometimes a full Appendix is destined for a wider description.
23 See Dreyfus v. Parnaso [1959] 1 Lloyd’s Rep. 125. 24 See Mediterranean Salvage Towage v. Seamar Trading & Commerce (The Reborn) [2009] 2 Lloyd’s Rep. 639. 25 See North West Metropolitan Regional Hospital Board v. Trollope & Colls [1973] 1 W.L.R. 601.
Chapter 2. Charter parties: nature and types
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The Owners of the vessel are responsible to ensure that the ship complies with the description
provided as well as her maintenance of condition and fitness for service during the duration of
the contract.
Employment
The employment is the right of the Charterers to exploit the ship within the trading limits, which
can be geographical, the types of cargo allowed to carry, etc. during the period of the contract.
Most of the time charter parties include provisions that permit the Charterers to sublet the vessel
or to carry cargo for third parties, which must be acknowledged by the issue of bills of lading that
regulate carrier’s responsibility and liability for loss or damage to the cargo.
The Hire
The hire is the regular and defined cash-flow the Owners are to perceive from the Charterers
because of the employment of the vessel, being one of the most basic obligation of the
Charterers is to make full and punctual payment of the hire. A vessel is “on hire” at any period of
the duration of the contract when the hire has been duly paid; however, any failure of the
payment can lead the vessel to be considered “off hire” - a concept included in a special provision
due to its delicacy.
Delivery
This term refers to the physical put of the ship at Charterers’ orders,26 usually defined to be in a
particular location and date, that triggers the start of the charter service. This concept is very
delicate since sets one of the most important events of the contract and includes several
cancellation provisions in many forms.
Redelivery
Contrary to the previous concept explained, the redelivery of the vessel happens when the
contract comes to an end, usually once the Owners have completed the last voyage orders of the
26 Mance, J., The Niizuru [1996] 2 Lloyd’s Rep. 66, page 68.
THE NYPE 2015 TIME CHARTER PARTY
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Charterers. Sometimes, this redelivery requires the vessel to reach a specific port or area,
whereas other provisions let the service to conclude once the last cargo is discharged.27
Indemnity
In favor of the Owners, many time charter parties contain specific clauses dealing with
indemnities against liabilities or other harmful consequences happened while complying with
Charterers’ orders.
Withdrawal
This concept allows the Owners to retire the vessel from the ordinary service of the Charterers
due to any specific reason included in the form - the most usual is the lack of payment of the hire.
Supplying the Vessel
As explained in the sub-chapter before, in time charters the nautical management of the vessel
remains under Owners’ responsibility, therefore it shall be obligation of the Owners to keep her
duly supplied to operate and to comply with the Charterers’ orders. Nonetheless, there exist
special clauses that, as an exception, state the Charterers to be in charge of supplying certain
aspects - being the most usual the fuel to run the ship.
2.5 International organizations
As explained in the sub-chapter “2.2 Types of charter parties: methods of chartering a ship”,
charter party standard forms can be developed by both public organizations and private
companies. Private companies have usually adopted the content of wider and more general
forms developed by public organizations and adapted it to their own interests depending on their
trades.
27 Donaldson, J., The Berge Tasta [1975] 1 Lloyd’s Rep. 422, page 424.
Chapter 2. Charter parties: nature and types
45
However, the international public organizations simply created these forms in order to help the
Industry and provide written versions of the most widely extended contracts to cover the
necessities of shipping business. Casually, the most important three organizations are those
which worked together to carry out the major revision of the NYPE charter party form, which will
be the ones that will be briefly described within this FDP: the BIMCO, the ASBA and the SMF.
2.5.1 The BIMCO
The first organization that will be explained in this sub-section is the Baltic and International
Maritime Council, the world’s largest entity formed by shipowners, Charterers, ship brokers and
agents and which include around the 60% of the current merchant fleet all around the world and
more than 1.900 members across 120 countries.
The organization, based in Copenhagen, Denmark, represents a large number of maritime
companies and many organizations to secure a level playing field for the global shipping industry.
For that, BIMCO continuously promotes the global standards and regulations of the maritime
industry by creating contracts and clauses to help the evolution of the business.
By the discussion of its committees, the organization develops flexible commercial agreements
widely used by the entire shipping Industry including containers, dry bulk, tankers… etc. For that,
the entity also considers the opinion of experts and tries to provide realistic and up-to-date
solutions to current shipping issues.
Furthermore, BIMCO acts as an advisory member at the IMO to facilitate the industry’s
experienced point of view of proposed regulations, their consequences and the suggestion of
solutions to make them workable and effective.
Figure 11. BIMCO's logo. Source: BIMCO's website.
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2.5.2 The ASBA
The Association of Ship Brokers and Agents is an independent trade association founded in 1934
in North America which provides membership to ship brokers and agents of the United States
and Canada. Through their members, the ASBA promotes the ideals and procedures of
professional shipping practices to develop the common interests of the industry and push it
forward.
The ASBA members comprises many different maritime actors such as ship brokers, certified
agents, shipowners, operators, Charterers, etc.
In addition, the association provides the Industry of educational courses to broaden the
knowledge of their membership in many maritime business aspects and sponsors professional
documents for fairer practices.
2.5.3 The SMF
The Singapore Maritime Foundation is an organization established on January 27, 2004, in the
heart of the city of Singapore to mediate between the public and private maritime sectors and
to provide the industry support with new ideas and initiatives to benefit its shipping business.
In addition, the SMF also explains in its webpage the close relationship the entity holds with the
Singapore Government to position the city as an International Maritime Centre and its
continuous proposals to help the development of the sector and its growth.
Figure 12. ASBA's logo. Source: ASBA's website.
Chapter 2. Charter parties: nature and types
47
Furthermore, the foundation also works to aware the students of maritime business of current
practices and to promote their interest on continuous education and develop their careers. As
the main Singapore pillar for economic growth, the SMF’s vision is to help the city to drive the
maritime sector to lead the Asian continent towards a stronger economic position through its
shipping business.
Figure 13. SMF's logo. Source: SMF's website.
THE NYPE 2015 TIME CHARTER PARTY
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Chapter 3. The New York Produce
Exchange Charter party
This chapter will be focused on explaining what the NYPE Charter party form is. For that, I will
explain its basis, the reasons and purposes why it was created, its history and its evolution during
the years and through its updates. This exhaustive analysis will take us to a deep knowledge of
the NYPE topic and will drive us to the most important Chapter of this FDP: the Chapter 4, where
we will entirely analyze the NYPE 2015 form.
3.1 The New York Produce Exchange: history and purposes
The very first important thing we must keep in mind before explaining the NYPE charter party is
the fact that it was born in 1913, when the trade market customs and traditions were quite
different from nowadays. Therefore, it will be both essential and useful to explain the history of
the NYPE organization itself so that we can achieve a solid understanding of the basis and
purposes of the charter party.
A Produce Exchange - such as New York’s - was nothing but an organized market-place. It did not
have any purpose of making money and had nothing to deal with the prices of commodities; it
was simply and merely organized trade. These kinds of organizations enabled their members to
take decisions as what the prices of these commodities should be and to keep in touch each other
to share all useful trading information. Their quotations represented the average opinion of all
those interested in a particular item, the value these people decided it was worth. By doing that,
they did not exactly controlled trade, but they regulated it, preventing itself from congestion,
chaos and unfairness.28
The New York Produce Exchange was one of the oldest commercial institutions of the American
continent, having its origins on the agricultural trade of New York when trading in wheat by
cargoes at a price per bushel was inaugurated.
28 Carhart, E.R. The Annals of the American Academy of Political and Social Science, Vol. 38, Issue 2
Chapter 3. The New York Produce Exchange Charter party
49
It was a market-place where commodities were bought in any quantities: from single packages
to whole cargoes. There, any people traded with each other as principals or for others as brokers
and made arrangements for the care of all the details of the business transactions, and where
honesty must prevail. It was the outgrowth of the needs and necessities of the commerce of the
port of New Yok, with clear and concise purposes such as:
- Maintain a suitable room for such market-place
- Inculcate just and equitable principles in trade
- Establish and maintain uniformity in commercial usages
- Acquire, preserve and disseminate valuable business information, and;
- Adjust controversies and misunderstandings between persons engaged in business.
This organization was, as already explained above, represented by American shippers, Charterers
and traders. Therefore, it looks easy to find out the reason why they launched the New York
Produce Exchange charter party form: all existing forms (mainly issued by the English
organizations) empowered the Owners, so there was a lack of any charter party that defended
the interests of the Charterers,
Figure 14. The New York Produce Exchange building. Source: The New York Times. A brick
beauty bites the dust.
THE NYPE 2015 TIME CHARTER PARTY
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The NYPE charter party form is, particularly, a Time charter party form. The duties of each part
are explained in the second chapter of this FDP, but we can summarize them down below to keep
in mind a better idea of what the “Time chartering” implicates and the main reason why this was
the form that the NYPE created.
As in any charter party, there are two major figures to consider: the Owner and the Charterer.
Starting with the last one, the responsibilities of the Charterer are the followings:
- Employing the ship,
- Finding the cargo,
- Paying the port, canal, cargo handling, tanks and holds cleaning and the fuel costs.
These responsibilities lead us to conclude that the Charterer holds the commercial management
of the ship and gets the benefit from trading her during the period of the charter.
On the other side, the Owner responsibility is simple: the nautical management, which include
the capital and the operating costs.
To sum up, by launching this new charter party form, the members of the New York Produce
Exchange held the commercial management of the vessels, trading wherever they found any
interesting business and only giving the Owner the nautical management.
As mentioned in the beginning of this section, the first NYPE charter party form was drawn in
1913, more than hundred years ago. It has been updated many times since then: on 1921; on
1931; on 1946 – which has been widely used during decades; on 1981 – it was renamed as
ASBATIME, since BIMCO collaborated with the update; on 1993 – mixing past versions with
common additional clauses; and finally on 2015 – the major one, involving the three most
important maritime organizations nowadays.
All along the rest of this third chapter, we will analyze the different forms and its updates,
explaining the clauses changed and the meaning of them. It is necessary to point out that this
analysis will start with the 1946 form since the three before – 1913, 1921 and 1931 – are very
difficult to find and are not really worth to explain: they were not very commonly used in the
market field.
Chapter 3. The New York Produce Exchange Charter party
51
3.2 The NYPE 1946
The NYPE 4629 was the very first successful time charter party amended by the American traders.
Although the following NYPE forms - 1981 and 1993 - have supposedly improved it, it is still the
most widely used in the dry cargo sector, and there are two main reasons that may make this
clear The first reason is that during over 50 years after the NYPE 46 was launched and before the
following version was published in 1981, many disputes arose from it, what gave the law
representatives the opportunity to explain and develop each clause of this charter party during
decades. The second reason is the mere conservative nature of the shipping business, which
states that if something is useful, it is not worth to be changed. As it can be seen in the Appendix,
the charter party is only three pages long but quite complete itself. As almost every charter party,
it is divided into three parts: the preamble; the main terms (or clauses) and the rider clauses.
In the following sub-sections, we will analyze the preamble and the main terms, since these two
parts always appear in the same way and order in the charter party, and only the details of every
contract, which are fulfilled by the Charterer – as explained in the lines 16 and 17 - change.
3.2.1 The preamble
The preamble of this charter party is made up of thirty-four lines. It is worth to explain all the
concepts outlined by these lines since they set the basis in which the form will be constructed:
- Line 1: states the date of the charter party.
- Lines 2 to 11: indicate the name of the Owner of the vessel and the description of the same.
This description is quite complete, since it details the name of the ship, the gross and net tons of
register, the power of the engines - measured in horse power, the bale capacity, the deadweight
capacity, the draft, the freeboard, the capacity of the bunker tanks and the type of bunker used
and the steaming capacity together with its consumption.
29 The New York Produce Exchange. The NYPE 46 Time Charter party. New York: October 3rd, 1946. Form available
at: http://www.fleetle.com/a/d/pdf/nype_46_portrait.pdf.
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It is also worth to highlight the line number 5, which says that the vessel must present the hull,
the machinery and all equipment in a thoroughly efficient state and points out the class of the
ship.
- Line 12: specifies the name of the Charterer and the city he comes from.
- Lines 13 to 15: these are maybe the three most important lines of the form, since they constitute
the charter agreement of the two parts and the duration of this agreement, also pointing out the
trading limits it will have.
- Lines 16 to 17: these two lines outline that the vessel sublet during any time of the duration of
the charter by the Charterer and state that the he is responsible of fulfilling the form
“…Charterers remaining responsible for the fulfillment of this charter party”. This gives,
undoubtedly, many business possibilities to the Charterers, since they can act as intermediates
only by leasing back the vessel to another interested part. Here we can observe one of the keys
of the American traders when designing the NYPE charter parties and how they designed them
as “pro-Charterer”.
- Lines 18 to 31: in these lines it is specified the method and conditions of the delivery of the
vessel. It is stated where she must be delivered, “safely lying and always afloat at all times of
tide”. If it is not possible to be delivered in the required dock, then she must be delivered
somewhere else previously agreed by both parts but ready to be used for the service, with
enough ballast water and power to run all winches. It is worth to highlight that the vessel must
have full crew complements, which gives us a hint about the nautical management of the Owner.
Moreover, it details the cargo that the vessel can transport, and gives the Owner the opportunity
to specify any cargo he would like to exclude. In the final lines, the places where the vessel will
be able to operate, and some excluded places are enumerated in order to stablish the final
conditions of the agreement.
- Lines 32-34: these lines are left in blank, so that any part can add any additional clause or
condition before finishing the preamble.
Chapter 3. The New York Produce Exchange Charter party
53
3.2.2 The main terms
The NYPE 46 charter party contains twenty-eight clauses which explain the obligations of each
part of the contract, limiting and explaining their responsibilities. The following lines will be useful
to get a deeper understanding of this charter party form, since all the clauses will be explained
one by one, trying to give a hint about their content and emphasizing on the facts that give the
“pro-Charterer” previously commented aspect to this form.
- Clause 1: this clause explains the duties of the Owner. We can easily find that the costs that he
must take care of are all regarding the nautical management of the vessel “…keep the vessel in a
thoroughly efficient state (…) during the service…” and the crew. It is also said the vessel must
“maintain her class” during the whole service for which she is chartered.
- Clause 2: this second clause explains totally the opposite than the clause number 1, since it
specifies the duties and expenses of the Charterer, which are the commercial costs. It is worth to
say that, in this clause, we can find several concepts protecting the interests of the Charterers
such as the possibility of the payment of the fuel by the Owner if “it has been previously agreed”
– which looks very unusual taking into account that this is a time charter party.
Other facts that evidence this protection of the Charterer can be observed in the specification
that any cost - such as consular charges, the extreme necessity to deviate the vessel to a port of
call or a fumigation on board - caused by any member of the crew, will be for Owner’s account.
- Clause 3: the Fuel clause. In these lines, it is specified the minimum and maximum level of fuel
the vessel must be returned with to the Owner. It must be outlined that this clause stablishes
that the remaining fuel must be paid back to the Charterer “…shall take over and pay for all fuel
remaining on board…”.
- Clause 4: this clause fixes the amount to be paid for the vessel from Charterer to Owner in
United States Currency per ton “on vessel’s total deadweight carrying capacity, including bunker
and stores on (…) summer freeboard…” and when and where to re-deliver her to the Owner.
- Clause 5: It is explained the way the payment must be done from Charterer, defining where
“…in New York…”, how “…in United States Currency…” and when “…semi-monthly in advance and
for the last half month or part of the same the approximate amount of hire…”. It is also mentioned
that “the Owners shall be at liberty to withdraw the vessel from the service of the Charterers,
without any prejudice to any claim they (the Owners) may otherwise have on the Charterers”.
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This clause also mentions how to proceed with non-prevised expenses: “Cash for vessel’s
ordinary disbursements at any port may be advanced as required by the Captain , by the
Charterers or their Agents, subject to 2.5% commission and such advances shall be deducted by
the hire”. However, the next sentence points another clear advantage out for the Charterer, since
“The Charterers shall in no way be responsible for the application of such advances”, giving a
possibility never seen before to them.
- Clause 6: states that any port the vessel will call, as per Charterer or Agents decision, must
“provide the vessel can safely lie always afloat at any time of tide”. Nevertheless, it gives the
possibility to safely lie her aground if it is customary for similar size vessels in such place.
- Clause 7: this clause explains that all space destined to carry cargo must be at the Charterers’
disposal, but “not more that she can reasonably stow and carry”. It is also permitted to the
Charterer’s to carry passengers – if there is accommodation available for them – at their own risk
and expenses by “paying the Owner X per day per passenger for accommodations and meals (…)
and Charterers are to bear such risk and expense”.
- Clause 8: it is stated that the Captain “shall be under the Owners and directions of the Charterers
as regards employment and agency” – even though being appointed by the Owner -, “prosecuting
his voyages with the utmost dispatch” and “signing the Bills of Lading for the cargo”. The Captain
is also pointed to supervise the load, stow and trim of the cargo, even though the Charterer is
responsible to properly carry it out.
- Clause 9: if the Charterer notices that the premises established in the eighth clause are not
being accomplished and he “shall have reason to be dissatisfied”, this clause gives him the
possibility to protest to the Owner, who will “investigate the same, and, if necessary, make a
change in the appointments”.
- Clause 10: this clause enables the Charterer to “appoint a Supercargo”, if necessary, to supervise
the “utmost dispatch” of the crew, being freely accommodated on board. The Charterer to pay
at the rate of 1 USD per day for the Supercargo victual.
- Clause 11: it explains that the Charterer “shall furnish the Captain (…) all requisite instructions
and sailing directions in writing” and the Master must provide “the Charterers, their Agents or
Supercargo (…) with a true copy of daily Logs”. These logs must detail all data concerning “the
course of the vessel, the distance ran and the consumption of fuel”.
Chapter 3. The New York Produce Exchange Charter party
55
These last four clauses (eighth, ninth, tenth and eleventh) give a huge scope of control to the
Charterer, providing him with some tools – as the nomination of a Supercargo or copies of the
Log of the voyages - about topics that are arranged by the Owner himself.
- Clause 12: makes the Captain responsible of the ventilation of the cargo when required.
- Clause 13: provides the Charterer the possibility to extend the charter contract “for a period of
X on giving written notice thereof to the Owners or their Agents X days previous to the expiration
of the first-named term…”.
- Clause 14: gives the Charterer the possibility to stablish a commence time of the charter. The
vessel must give written notice of readiness, enabling the Charterer “the option of cancelling this
Charter at any time not later than the day of vessel’s readiness”, providing somehow a clear
advantage to the Charterer.
- Clause 15: protects the Charterer by stating that “any extra expenses shall be deducted from the
hire” and “the payment of the hire shall cease for the time thereby lost” for any deficiency of the
vessel or the crew of which the Owner must have taken care.
- Clause 16: this clause insists on the navigation management, remaining on the Owner since “The
vessel shall have the liberty to sail with or without pilots, to tow and to be towed, to assist vessels
in distress, and to deviate for the purpose of saving life and property”. Nevertheless, it concludes
that if “should the vessel be lost, money paid in advance and not earned (…) shall be returned to
the Charterer at once”.
- Clause 17: in case of any dispute, this clause states that it “shall be referred to three persons at
New York, one to be appointed by each of the parties hereto, and the third by the two so chosen”.
After analyzing the case and taking a decision by simple majority, it “shall be final (…) and may
be made a rule of the Court”.
- Clause 18: exposes that the Owner “shall have a lien upon all cargoes (…) and all sub-freights”
and the Charterer “to have a lien on the Ship for all moneys paid in advance and not earned”.
Nevertheless, although this clause seems to treat both Owner and Charterer as equals, it ends
announcing “Charterer will not suffer (…) any lien or encumbrance incurred by them or their
agents, which might have priority over the title and interest of the Owners in the Vessel.” which
is again clearly favoring the Charterer.
THE NYPE 2015 TIME CHARTER PARTY
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- Clause 19: this clause describes the actions that would need to be performed in case of derelicts,
salvages and General Average. It is included, among other topics, the proportion of benefits for
each part, the Rules to follow – generally the York-Antwerp Rules and the laws and usages at the
Port of New York – and the responsibilities that the carrier, the shipper and the consignee in
these circumstances.
- Clause 20: in one line and a half, it stablishes that “fuel used by the vessel while off hire (…) and
the cost of replacing the same, to be allowed by Owners”. Nonetheless, if this clause was written
the other way around, we would read that the Charterer would not pay the fuel while he is not
using the vessel, what gives even more evidence of the Charterer’s advantage in this contract.
It is interesting to explain that this Clause had its origin in the original NYPE 1913 version. At that
time vessel were generally coal powered, whereas lighting for the crew was by paraffin. The coal
was purchased by the Charterers and the paraffin by the Owners. If coal was also used for
domestic cooking and heating, for example in grates and stoves, the shipowners would pay for
the coal so used. This Clause provides for this, and its effect was that fuel used for domestic
consumption of the crew is paid for by the shipowner.
- Clause 21: when Charterer and Captain think necessary and “as the vessel may be from time to
time employed in tropical water during the term of this Charter”, she will be docked “at least once
every six months”. It is important to highlight that the “payment of the hire to be suspended until
she is again in proper state for the service”.
- Clause 22: as explained in this clause, the Owner must maintain all loading and discharge
equipment fit and operative at any time, providing “lanterns and oil for night work” if necessary.
With these lines, Charterers make sure that the vessel will be able to carry smooth operations
out whenever calling any port.
- Clause 23: the vessel must be ready to work at any time, with “all winches to be at Charterer’s
disposal” for the Charterer and enough crewmembers to handle them. The Charterer must pay
“overtime work done in accordance” for crew and shore winchmen in case that “…rules of the
port, or labor unions, prevent crew from driving winches”. If there is any required winch not fit
for working, “the Owner to pay for shore engines (…) and any loss of time occasioned thereby”.
Chapter 3. The New York Produce Exchange Charter party
57
- Clause 24: this clause explains that this charter party is subject to the terms of the “Act of
relating to Navigation of Vessels, etc.”, the Act of Congress of the United States approved on the
13th day of February,1893, making obvious the origin of the Charterer. Furthermore, there are
two special clauses added in which this NYPE charter party is subject to which “are to be included
in all bills of lading issued hereunder”.
The first one is the USA Clause Paramount - which talks about the bill of lading terms and the
rules they must follow; the second one is the Both-to-Blame Collision Clause – which specifies
about the responsibilities and liabilities about the cargo in case of a collision between the ship
and another different vessel. For a better comprehension of this clauses, shall redirect to the
Appendix of the NYPE 46 charter party included in this paper.
- Clause 25: the Ice clause - states that “The vessel shall not be required to enter any ice-bound
port (…) where there is risk (…) the vessel will not be able on account of ice to safely enter the port
or to get out…”
- Clause 26: here we can observe another clause protecting the Charterer, since it points out that
“Nothing herein stated is to be construed as a demise of the vessel to the Charterers”.
Furthermore, and just in case any line above has caused any misunderstanding in favor of the
Owner, his general responsibilities – the navigational management – are repeated with the
emphasis “same as when trading for their own account”.
- Clause 27: It is indicated that a commission of the 2,5% is to be paid from the vessel and Owners
to a specified actor “on hire paid and earned under this Charter, and also upon any continuation
or extension…”.
- Clause 28: Similar to the previous clause, it fixes another 2,5% of address commission and who
will earn it.
3.2.3 Conclusions
As it was previously explained at the beginning of this sub-chapter, this version of NYPE was the
very first successful amended by the American traders. After having analysed it, it turns very easy
to find out the reasons of its success, which was owned due to two main reasons.
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The first reason was its simplicity. It is very well known that shipping – or any - contracts do
always have loads of clauses which need to be legally interpreted by experts, so the longer the
contract is, the more disputes can arise from it. In this case, with only 28 clauses written in 175
lines, issues have a certain limit, and after years and years of use – we must remember that the
next NYPE version was not launched until June 12th, 1981 – these disputes were continuously
dealt and all the maritime sector got used to its interpretation, easing the solving of any issue.
The second reason is the favourable, historic date it was issued. By the end of the 50s decade
and after the Second World War, trade started to grow exponentially, and economy
experimented its natural evolution. By that time – or ever after any war - the supply of existing
cargo vessels was much larger than the demand, so cargo Owners – also known as Charterers –
had a very valuable weapon in their hands among vessels’ Owners, which needed to accept
Charterers demands. In this case, and due to their war’s victory, most Charterers were American,
and this version of NYPE was issued and widely accepted.
This second reason leads us to point out the “pro-Charterer” previously commented aspect back
again. As it has been explained during the analysis of this charter party, it is nothing but easy to
find these characteristic details:
- In Lines 16 and 17, it is given the option to the Charterers to sublet the vessel and state
that the Charterer is responsible of fulfilling the form “…Charterers remaining responsible
for the fulfillment of this charter party”.
- In Clause 2, there exist the possibility of the payment of the fuel by the Owner if “it has
been previously agreed”, even though it is very uncommon to find this in any time charter
party.
- In Clause 5, the responsibility about advancing any non-prevised expense is withdrawn
from the Charterer, forcing the Owner or the crew to solve this issue.
- In Clause 10, the Charterer has the possibility of nominating a Supercargo to supervise
the utmost dispatch, being freely accommodated on board.
- In Clause 11, the Charterer or his representatives have the possibility to arrange a true
copy of the Daily Log wrote by the crew to supervise the same utmost dispatch.
Chapter 3. The New York Produce Exchange Charter party
59
- In Clause 15, the Charterer gets shielded by ceasing the hire for any time lost due to any
deficiency of the vessel. Furthermore, in the next Clause (16), it is stated that if the vessel
gets lost, all money paid in advanced and not earned by the Charterer must be returned
to him at once.
- The Clause 18 is one of the most revealing one. Even though a balance regarding liens is
set between the Owner and the Charterer, a final condition favouring the Charterer
stablishes a clear disequilibrium among them (see explanation of the Clause on the sub-
section before).
- In Clause 22, the Charterers make sure that the vessel is provided with all necessary tools
to carry smooth operations out.
- Finally, in Clause 26, the responsibilities of the Owner are stated again and the meaningful
sentence “Nothing herein stated is to be construed as a demise of the vessel to the
Charterers” is put as the icing on the cake.
At this stage, we can give this analysis of the NYPE 46 charter party as concluded. The following
sub-section will focus on the next version of the NYPE: the 1981 version – also known as
ASBATIME.
3.3 The NYPE 81 (ASBATIME)
Almost thirty-five years after the launching of the NYPE 46 charter party, the Association of
Shipbrokers and Agents of the USA (ASBA) published a new version of this document, renaming
it as ASBATIME.30 Nonetheless, and as explained in the introduction of this chapter, by the time
of publication of this new version of the NYPE charter party, the NYPE 46 had already become
very widely used, and despite the availability of a newer up to date version, it transpired that few
Charterers were prepared to abandon the use of the NYPE 46 and the additional side-clauses
(also known as rider clauses) added to it.
30 The Association of Ship Brokers & Agents (U.S.A.). The NYPE 81 Time Charter party or ASBATIME. New York: June 12th, 1981. Form available at: http://www.fleetle.com/a/d/pdf/asbatime_nype_81.pdf.
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As explained in the NYPE 46 analysis, every charter party is divided into two parts: the preamble
and the main terms. Additionally, a third part can be found, which are the side or rider clauses,
which are different in every contract depending on the Charterers or Owners demands. In the
following sub-sections, as done with the NYPE 46 version, both preamble and main terms will be
analysed, drawing a conclusion and general overview of the entire charter party as well.
3.3.1 The preamble
The preamble of this charter party is made up of sixty-two lines. As in any other charter party,
these concepts set the basis in which the form will be constructed, so it is important to keep a
clear idea of them all:
- Lines 1-2: stablish the date when and the place where the charter party is “made and
concluded”.
- Lines 3-5: the gaps of these lines must be fulfilled with the name of the Owners and the name
of the vessel that will be employed.
- Lines 6-24: these lines are used to perform a precise and complete description of the vessel
before named. This description is quite similar as in the NYPE 46 preamble, since it also describes
the gross and net tons of register, the power of the engines - measured in horse power, the
class, the bale – or grain in this case as well - capacity, the deadweight capacity, the draft, the
freeboard, the capacity of the bunker tanks and the type of bunker used and the steaming
capacity together with its consumption.
However, we can find some slight changes trying to adapt it to the current times of this version
and to improve some characteristics as:
✓ The draft: in this version, it is specified to be measured in salt water. This specification
might have been done to spot the difference of the use of the charter party between
sweet-water rivers or lakes and salty-water seas or oceans, since a draft issue could arise
in case of mixed routes.
✓ The stores capacity: even though this characteristic appears to be limited as “not
exceeding one and one-half percent of ship’s deadweight capacity, allowing a minimum
of fifty tones” in the NYPE 46 version, it is simply indicated in the ASBATIME like a free gap
to fill.
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✓ The type of bunker product used: the difference in this characteristic is that in the NYPE
46 version, three different options could be chosen as “best Welsh-coal – best grade of
fuel – best grade Diesel oil”, whereas in the ASBATIME a free gap to fill is placed, showing
no limits in the type of bunker used.
- Lines 25-26: recognize the Charterers and their city of origin.
- Lines 27-30: stablish the agreement of both parts and the duration of the contract, always valid
“within below mentioned trading limits”.
- Lines 31-33: gives the Charterer the “liberty to sublet the vessel” during any part of the contract
and also states that “Charterers shall remain responsible for the fulfilment of this charter”. These
lines give a huge power to the Charterers, since they grant them to sublet the vessel to whoever
at any time, without any special permission from the Owner.
Furthermore, they also allow the Charterer to become a new Owner for the subsequent sub-
Charterer, being the responsible of filling the charter party as well. For all above, these lines act
as a “pro-Charterer” trait of this contract, since we shall never forget it was created by the ASBA.
- Lines 34-45: explains the delivery conditions of the vessel. These lines are quite similar as the
ones of the NYPE 46, since they also describe that the port of delivery must let the vessel “safely
lie, always afloat, at all times of tide”. It is also pointed out that, in case that place of delivery is
not available “time shall count as provided in Clause 5 – Hire payment and commencement”. In
the following lines, from 41 to 45, it is detailed the conditions of full readiness of the vessel as
“shall be ready to receive cargo with clean-swept holds and tight (…) and in every way fitted for
ordinary cargo service”. However, there are two main differences between the ASBATIMA and
the NYPE 46 in these lines:
✓ Whereas in the NYPE 46 it is stated that “…winches and donkey boiler with sufficient steam
power, or if not equipped with donkey boiler, then other power sufficient to run all the
winches at one and the same time”, it is written more generally in the ASBATIME as “with
sufficient power to operate all cargo-handling gear simultaneously”. This change may
have been done since, from the 1946 to the 1981 version, which involves 35 years of
vessel’s evolution, some cargo handling equipment changed, and it was necessary a more
general sentence.
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✓ Something quite similar is observed in the following lines: in the NYPE 46, it is stated
that the vessel must be fitted “with full complement of officers, seamen, engineers
and firemen for a vessel of her tonnage”, whilst in the ASBATIME this fact is written
as “with full complement of officers and crew for a vessel of her tonnage”, something
much more general. As in the change before explained, this may have been changed
due to the evolution of the ships and the maritime industry, which, after 35 years,
might require some more tasks that those described in the 46 version.
- Lines 46-50: explains that the vessel will be employed to carry lawful cargo, excluding any
dangerous or similar cargo “unless carried in accordance with the requirements (…) of the proper
authorities of the state of the vessel’s registry (…) ports of shipment and discharge or any
intermediate state”.
- Lines 51-56: enumerates the prohibited cargo to be shipped: “livestock, arms, ammunition,
explosives” and leaves some blank lines to include more banned cargo.
- Lines 57-62: in these final lines of the preamble are set the trading limits. This is quite different
that in the NYPE 46 version, in which there was a long list of allowed places and also “excluding
Magdalena River, River St. Lawrence between October 31st and May 15th, Hudson Bay, (…) and,
when out of season, White Sea, Black Sea and the Baltic.”. Still, in the ASBATIME, this is again
made shorter. Here, it is only written that “the vessel shall be employed in such lawful trades
between safe ports and places within…”, leaving blank spaces to be filled for the accepted trading
places, and then “excluding…” and more blank spaces to write down those banned locations.
Compared to the previous form on the NYPE charter party, dated on 1946, the concepts included
in the preamble of the ASBATIME are quite similar even though it appears to be a bit longer,
something that will be explained in the conclusion.
3.3.2 The main terms
The NYPE 81 charter party contains twenty-seven clauses explaining the obligations and
responsibilities of each part. Even they are quite similar as well to the NYPE 46 main terms, the
small differences between each other will be explained in the conclusion.
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- Clause 1 – Owners to provide: this clause enumerates the aspects the Owner must take care of
and provide, being them no others than all those pertaining to the readiness of the vessel such
as “insurance (…), all provisions, cabin, deck, engine-room, (…) stores, including boiler water…”;
its maintenance “shall maintain vessel’s class and (…) efficient state in hull, machinery and
equipment…” and all crew expenses such as “wages, consular shipping and discharging fees (…)
and port services pertaining to the crew”.
- Clause 2 – Charterers to provide: aversely to the previous clause, here are stated everything the
Charterers take over, such as “fuel (…), port charges, pilotages, towages, agencies, commissions,
(…) and all other usual expenses except those stated in Clause 1”. Nevertheless, it is even more
important to point out everything outlined that the Charterers are not responsible of, such as
“consular charges pertaining to individual crew members or flag of the vessel”.
Furthermore, even though it is outlined at the right beginning of the clause the fact that “while
the vessel is on hire”, it is also noted that “when the vessel puts into a port for causes for which
vessel is responsible” or to carry out “fumigations ordered because of illness of the crew”, all such
charges shall be paid by the Owners.
- Clause 3 – Bunkers on Delivery and Redelivery: it is fixed the exact quantity of fuel and diesel oil
the Owner must deliver the vessel to the Charterers and the price per ton of each bunker type,
being the same applied to the Charterer when redelivering the vessel to the Owner. Quantities
can be defined in metric or long tones, but the same measurement unit must be used throughout
all the clause.
- Clause 4 – Rate of Hire: to detail the hire, two different options are given: a fixed rate per day
or a fixed “United States Currency per ton on vessel’s total deadweight carrying capacity,
including bunkers and stores, on (…) summer freeboard, per calendar month…”.
In this clause it is also included the Redelivery Areas and Notices, stating that “redelivery in like
good order and condition, ordinary wear and tear excepted, (…) at (place of redelivery) unless
otherwise agreed”. It is given the Charterer the odd to deliver the vessel in another “probable”
port, giving to the Owner the vessel’s expected date of redelivery with a fixed amount of notice
days in advance.
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- Clause 5 – Hire Payment and Commencement / Cash advances: the hire must be paid and
received in New York in United States Currency, and describes how “…semi-monthly in advance,
and for the last half month or part of the same the approximate amount of hire”. It is also pointed
out that if this payment “not cover the actual time, hire shall be paid for the balance day by day
as it becomes due, if so required by Owners”. On the other side, “failing the punctual and regular
payment of the hire, (…), the Owners shall be at liberty to withdraw the vessel from the service of
the Charterers”.
Regarding the commencement of the charter, the Charterers shall have liberty to employ the
vessel as soon as she gives a written notice of readiness or at 7 AM on the working day after,
depending on their interests.
This clause also mentions how to proceed with non-prevised expenses: “Cash for vessel’s
ordinary disbursements at any port may be advanced as required by the Captain, by the
Charterers or their Agents, subject to 2.5% commission and such advances shall be deducted by
the hire”. However, the next sentence points another clear advantage out for the Charterer, since
“The Charterers shall in no way be responsible for the application of such advances”, possibility
given in NYPE 46 and maintained in this version.
- Clause 6 – Berths: exactly as in the NYPE 46 version, it states that any port the vessel will call,
as per Charterer or Agents decision, must “provide the vessel can safely lie always afloat at any
time of tide”. Nevertheless, it gives the possibility to safely lie her aground if it is customary for
similar size vessels in such place.
- Clause 7 – Spaces available: it explains that all usual places of loading and also accommodations
for supercargo, if carried, must be at the Charterers’ disposal. On the other side, “sufficient space
for ship’s officers, crew, tackle, apparel, furniture, stores and fuel” shall be reserved.
- Clause 8 – Prosecution of Voyages: it is pointed out that, even though the Captain is “appointed
by the Owners”, he “shall be under the orders and directions of the Charterers as regards
employment and agency”, and “shall prosecute his voyages with due dispatch”. However, the
Charterers “are to perform all cargo handling at their expense under the supervision of the
Captain”, being also responsible to sign the bills of lading.
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There is also brand-new possibility here given to the Charterers in case they want to take its
odds.: “Charterers or their agent may sign bills of lading on behalf of the Captain”. However, “the
Charterers shall indemnify the Owners against all consequences (…) which may arise from any
inconsistency between this charter and any bills of lading” signed by the Charterers.
- Clause 9 – Conduct of Captain: exactly the same as written in the NYPE 46 version, if the
Charterer notices that the premises established in the eighth clause are not being accomplished
and he “shall have reason to be dissatisfied”, this clause gives him the possibility to protest to the
Owner, who will “investigate the same, and, if necessary, make a change in the appointments”.
- Clause 10 – Supercargo and Meals: this clause gives the Charterers the possibility to appoint a
Supercargo with the mission to “accompany the vessel and see that voyages are prosecuted with
due dispatch”, paying a rate left in blank per day.
On the other side, it is also stated that the “Owners shall victual pilots and custom officers”, but
also, if the Charterers give permission, “shall victual tally clerks, stevedore’s foreman, etc.” for a
rate left in blank per meal, which will be paid by the Charterers.
- Clause 11 – Sailing Orders and Logs: as in the previous version, it explains that the Charterer
“shall furnish the Captain (…) all requisite instructions and sailing directions in writing” and
provide “the Charterers, their Agents or Supercargo (…) with a true copy of daily Logs”. These logs
– both deck and engine - must detail all data concerning “the course of the vessel, the distance
ran and the consumption of fuel”. It is easy to identify the pro-Charterer facet of this clause,
where sometimes it is even included a wording allowing the Charterers to check the vessel’s
performance by reference to a specialised weather-routing company and, in case of
disagreement between the Logs and the independent reports, these last are to take precedence
over the Logs – which is vital in respect of off-hire and vessel’s performance.
- Clause 12 – Ventilation: makes the Captain responsible of the ventilation of the cargo when
required.
- Clause 13 – Continuation: gives the option to the Charterers to continue the Charter for the
desired period, without requiring any written option given in advance to the Owners.
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- Clause 14 – Laydays/Cancelling: as in the NYPE 46 version, it gives the Charterer the possibility
to stablish a commence time of the charter. The vessel must give written notice of readiness,
enabling the Charterer “the option of cancelling this Charter at any time not later than the day of
vessel’s readiness”, providing somehow a clear advantage to the Charterer.
- Clause 15 – Off Hire: it is explained that, during any loss of time due to any damage or deficiency
of the ship “unless resulting from inherent vice, quality or defect of the cargo, (…), the payment
of the hire and overtime (…) shall cease for the time thereby lost”.
It is also included that “should the vessel deviate during a voyage, contrary to the orders of the
Charterers, for any reason other than accident to the cargo, the hire is to be suspended (…) until
she is again in the same (…) position and the voyage resumed”. Furthermore, it is included that
all fuel used during this time is to be paid by the Owners, since the vessel is off hire, highlighting
the hardness of this conditions and the way the Charterers avoid any extra expense not caused
by them.
- Clause 16 - Total Loss / Exceptions / Liberties: as in the previous version of the NYPE, this clause
insists on the navigation liberties of the Owners, since “The vessel shall have the liberty to sail
with or without pilots, to tow and to be towed, to assist vessels in distress, and to deviate for the
purpose of saving life and property”. Nevertheless, it concludes that if “should the vessel be lost,
money paid in advance and not earned (…) shall be returned to the Charterer at once”.
- Clause 17 – Arbitration: in case of any dispute during the time of the charter, this clause explains
that it “shall be referred to three persons at New York, one to be appointed by each of the parties
hereto, and the third by the two so chosen”. After analysing the case and taking a decision by
simple majority, it “shall be final (…) and may be made a rule of the Court”. However, the only
imposition is that these men must be “conversant with shipping matters”.
- Clause 18 – Liens: as in the NYPE 46 version, this clause exposes that the Owner “shall have a
lien upon all cargoes (…) and all sub-freights” and the Charterer “to have a lien on the Ship for all
moneys paid in advance and not earned”. Nevertheless, although this clause seems to treat both
Owner and Charterer as equals, it ends announcing “Charterer will not suffer (…) any lien or
encumbrance incurred by them or their agents, which might have priority over the title and
interest of the Owners in the Vessel.” which is again clearly favouring the Charterer.
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- Clause 19 – Salvage: in this clause it is stated that “All derelicts and salvage shall for Owners and
Charterers equal benefit”. Furthermore, in case of General Average, the York-Antwerp Rules 1974
must be applied “at such port or place in the United States (…) selected by the Owner” and
whenever these rules do not apply, “according to the laws and usage at the port of New York”. It
is also pointed out that any disbursement must be done in the United States currency, explaining
the way the deposits for average agreements shall be made to ensure the correct refund to the
Owners.
Regarding the York-Antwerp Rules, it is specified that all bills of lading issued during the charter
contain a provision so that general average will be adjusted to these Rules, most specifically to
the 1974 update as well as “include the “New Jason Clause” as per Clause 23”.
- Clause 20 – Drydocking: at the beginning of this clause, there is a blank space where it must be
specified the date the vessel was drydocked. After that, it is given the option to drydock the
vessel during the charter for due reasons.
However, “Payment of hire shall be suspended upon deviation from Charterers’ service until
vessel is again placed at Charterers’ disposal”, and as if it was not enough preventive for the
Charterers, it is also appointed that the redelivery shall be made “at a point not less favorable to
Charterers than when the hire was suspended”.
- Clause 21 – Cargo Gear / Stevedores Stand-by: states how the Owners must maintain the cargo
gear with blank spaces to be filled up with its description. It also tells that Owners must provide
all lights on board for night work, but “additional lights (…) shall be at Charterers’ expense”.
It is important to highlight that if there is any cargo gear inoperative, whatever the reason might
be, “the vessel is to be considered to be off hire to the extent that time is actually lost”, being the
Owners responsible of any extra expenses that could arise from it.
- Clause 22 – Crew Overtime: for this extra work of the crew, the Charterers are to pay a fixed
amount of $ per month or pro rata.
- Clause 23 – Clauses Paramount: at the beginning of this clause, it is explained that all bills of
lading must include the “Clause Paramount” which bounds them to “the Carriage of Goods by
Sea Act of the United States, the Hague Rules, the Hague-Visby Rules, (…) or such other similar
national legislation” depending of the origin or destination of the bills of lading.
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Furthermore, it states that the charter will be subject to the following three clauses:
1. New Both-to-Blame Collision Clause: distributes indemnifying responsibilities with third
parties in case of losses or liabilities due to a collision during the charter.
2. New Jason Clause: states that, in case the carrier is not responsible to any damage
occurred before or after starting the voyage, any other part involved in the charter will
contribute with the carrier in general average expenses.
3. War Clauses: as per this clause, the vessel shall not navigate nor enter at any war zone,
except allowed by the Owner. If such allowance is received, Charterers are to pay for any
extra insurance as well as additional cost of wages and insurance for the crew.
- Clause 24 – Ice: in this clause, it is explained that the vessel “shall not be required to enter in
any icebound port or area (…) where there is risk (…) the vessel will not be able on account of ice
to safely enter or remain in the port or area or to get out”.
- Clause 25 – Navigation: to make sure anything above is taken as an exclusion of any obligation
from the vessel to the Charterers, it insists that “the Owners shall remain responsible” of
everything related to the nautical management – as it is, in fact, a Time charter party.
- Clause 26 – Commissions: it is fixed the exact quantity of commission the Owners and vessel
will pay to another specific actor “on hire earned and paid under this Charter, and also upon any
continuation or extension…”.
- Clause 27 – Address: fixes the amount of address commission and who will earn it.
- Rider: in these last two lines, the required Rider Clauses are included by only writing down their
number – since they are attached at the end of the charter party – previously agreed by both
parts.
3.3.3 Rider of Suggested Additional Clauses
One of the main updates of the ASBATIME is the Rider Clauses annexed at the end of the main
terms. In the attachment of two pages long, a total of eleven Additional Clauses can be found,
which are a compilation of all those mostly used since the launch of the NYPE 46 version. The aim
to annex these Clauses was no other than giving the possibility to the Owners and the Charterers
to add any of them, always previously agreed, in an ordered and regulated manner.
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- Clause 28 – Extension of Cancelling: this Clause gives the Owners the opportunity to “require
the Charterers to declare whether or not they will cancel the Charter” if they know that “the vessel
will not be ready for delivery by the cancelling date (…) and are able to state (…) the date on which
the vessel will be ready”. In case the Charterers are to still go on with the Charter or fail to reply,
then “the seventh day after the expected date of readiness for delivery (…) shall replace the
original cancelling date”.
This Clause was mostly introduced by Owners in order to minimize their losses in cases where,
even “the exercise of due diligence”, they could not accomplish with the delivery date due to
third party setbacks.
- Clause 29 – Grace Period: in this Clause it is stated that, in case the Charterers “fail to make
punctual and regular payment” of the hire, Owners are to give the Charterers “two clear banking
days (…) written notice to rectify the failure”. However, even though this Rider Clause favours the
Charterers and softens the punctual payment of the hire, it is also stated that “the payment
received (…) will bear interest at the rate of 0.1 percent per day”, in compensation to the Owners.
Furthermore, the last paragraph of this Clause is important to be remarked since it withholds the
Owners of any of their responsibilities among the Charter during the outstanding of the hire,
being the Charterers bounded to indemnify the Owners as per above specifications and also
stating that “any extra expenses resulting from such withholding shall be for the Charterer’s
account”.
- Clause 30 – Cargo Claims: this Clause distributes the damages and claim for the cargo between
the Owners and the Charterers depending on the cause of the alleged damage related to the
responsibilities of each part, sharing costs if only the claims are due to “shortage ex ship”.
- Clause 31 – War Cancellation: this Clause prevents the Charter if a war outbreaks between two
or more countries therein listed, with the possibility to add as many as accorded by both parts.
In case it happens, the vessel is to be redelivered by the Charterers depending whether she has
cargo on board or not. However, the hire must keep being paid and “except as aforesaid all other
provisions of this Charter shall apply until redelivery”.
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- Clause 32 – War bonus: it is stated that “any war bonus to officers and crew (…) shall be for
Charterers’ account”. Even though this is already mentioned in Clause 23 (c), it looks foreseeable
to include it again since if the trade of the Charter continues may be because of the Charterers’
interests.
- Clause 33 – Requisition: this Clause explains that in case “the vessel be requisitioned by the
government of the vessel’s flag during the period of this Charter”, the vessel is to proceed off
hire, which in case to be paid by the foresaid government, it will be “retained by the Owners”.
Nevertheless, the period of the Charter during the requisition will keep counting.
- Clause 34 – On/Off Hire Survey: at delivery and redelivery time, each part is to nominate a
surveyor, who will proceed to perform a joint survey of the vessel to evaluate her state and any
deficiencies so far appreciated. Once the survey is concluded, “a single report shall be prepared
on each occasion and signed by each surveyor”, filling a separate report in case of unagreed items.
It is also stated that in case of failing to the attention of the survey or the report’s signature,
“such party shall nevertheless be bound for all purposes by the findings in any report prepared by
the other party”. It is important to highlight as well that “on-hire survey shall be on Charterers’
time and off-hire survey on Owners’ time”.
- Clause 35 – Stevedore Damage: this Clause explains the specific actions the Captain must make
if any damage caused by stevedores ever happen. However, any “damaged involving
seaworthiness shall be repaired without delay to the vessel (…) in Charterers’ time”. On the other
side, “other minor repairs shall be done at the same time (…) or while vessel is in drydock in
Owners’ time”.
Nonetheless, any expenses and time spent in repairing stevedore damage “shall be for
Charterers’ account (…) whether or not payment has been made by stevedores to Charterers”.
- Clause 36 – Charterers’ colors: if desired by the Charterers’, they have the privilege of “flying
their own house flag and paint the vessel with their own markings”, repainting her prior
redelivery and assuming its expenses and time costs.
- Clause 37 – Return Premium: it is stated that “Charterers shall have the benefit of any return
insurance premium receivable by Owners (…) by reason of vessel being in port fir a minimum
period of 30 days” if she is on hire or pro rata for the time on hire.
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- Clause 38 – Water Pollution: as a matter of prevention for the Charterers’, the vessel is to be
set off hire “during any time lost on account of vessel’s non-compliance (…) pertaining to water
pollution”. It is also worth to highlight that the vessel is required “to have secured and carry on
board the vessel a Certificate of Financial Responsibility as required under U.S. law” in case of
calling any U.S. port.
3.3.4 Comparison between NYPE 46 and ASBATIME
Even though some changes have been found between the ASBATIME and the NYPE 46 version all
along this analysis, both clauses are quite similar from the first moment on.
Starting with the comparison of both preambles, we can find the ASBATIME’s quite longer than
the NYPE 46’s preamble – 62 lines versus 35. However, the main reason for that is no other than
a physical one: in the ASBATIME, all the text is organized by the concepts of the lines at their
sides, similar to a title.
For that reason, lines are simply shorter and therefore more lines are required. Nevertheless, this
organization makes the whole charter party easier to read and to find the concepts on it, a detail
which is quite positive.
The two main qualitative differences here are found in two ways: specification and synthesis.
Regarding the specification, a clear example is found in line 14, where it is emphasized that the
draft must be measured in salt water. Even though no explanation about this technicality is done,
it can be due to any issue arisen during the use of the previous version, since drafts change
significantly from sea to fresh water.
About the synthesis, several examples are found throughout all the preamble.
Firstly, some of the characteristics are left in a blank space to be fulfilled, as the stores capacity,
which shifts from being limited as “not exceeding one and one-half percent of ship’s deadweight
capacity, allowing a minimum of fifty tones” or the type of bunker to be used, which shifts from
having three different bunker options could be chosen.
Secondly, in lines 41 to 45, there is most likely a generational update rather than a synthesis,
since whereas in the NYPE 46 it is stated that “…winches and donkey boiler with sufficient steam
power, or if not equipped with donkey boiler, then other power sufficient to run all the winches
at one and the same time”, in ASBATIME it is simply indicate as “with sufficient power to operate
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all cargo-handling gear simultaneously”. This change might have been done because of the
evolution of the maritime industry, since we shall never forget that 35 years separate both
clauses.
Something quite similar is observed a couples of lines below, where it is stated that the vessel
must be fitted “with full complement of officers and crew for a vessel of her tonnage” rather than
“with full complement of officers, seamen, engineers and firemen for a vessel of her tonnage”
found in the NYPE 46 version.
To conclude, in the final lines of the preamble are set the trading limits which were widely listed
in the NYPE 46 version whilst, in the ASBATIME, it is only written that “the vessel shall be
employed in such lawful trades between safe ports and places within…”, leaving blank spaces to
be filled for the accepted trading places, and then “excluding…” and more blank spaces to write
down those banned locations.
Regarding the clauses, the changes are not very numerous or at least do not contribute to
improve this version above the NYPE 46 significantly – these differences are, however, mere
specifications of some terms which could have caused controversy during the use of the NYPE 46
or simply updates after nearly fifty years.
In Clause 1 of NYPE 81, where “Owners to Provide”, it is pointed out that any “port services
pertaining to the crew” are to be paid by the Owners. That is due to in Clause 2 of the NYPE 46,
where “Charterers to Provide”, it was written that “port charges” were to be paid by the
Charterers – in NYPE 81, with this addition, all those concerning the crew are not to be paid by
the Charterers anymore. In fact, it is also added that those “consular charges due to the flag of
the vessel” will not be held by the Charterers no more, avoiding them more less desired expenses.
Aversely to these additions, one more is done even though it is not in favour of the Charterers
interests since they are stated to pay for towages when necessary.
In Clause 3, “Bunkers on Delivery and Redelivery”, a generational change is found due to the
appearance of the Diesel Oil as a bunker on board. Furthermore, the number of tons of each
bunker type and its price, both on delivery and redelivery, are to be fixed prior the signature of
the contract, avoiding prices’ variation issues.
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In Clause 4, “Rate of Hire”, it is given the possibility of fixing a daily price for the vessel; however,
in Clause 5, “Hire Payment and Commencement”, the possibility previously given to the
Charterers to use a deposit or a bank guarantee in case of failing to the payment of the hire is
withdrawn.
In Clause 7, “Spaces Available”, another advantage is denied to the Charterers, since nothing is
written about their “privilege of passengers as far as accommodation allow”, nor any fee to be
paid for them, of course.
It is in Clause 8, “Bills of Lading”, where one of the most notorious changes – favouring the
Charterer – is found, since they hold the option to have the BLs sign from themselves or their
agents. Even though an extenuating charge of total responsibility is taken in case of using this
option, it still represents a great advantage of the Charterers.
In Clause 10, “Supercargo and meals”, another generational change is found, since the rate to be
paid by the Charterers for the Supercargo is left blank – in NYPE 46, the rate to be paid was of
“1.00 $ per day”.
Something quite similar happens in Clause 11, “Sailing Orders and Logs”, since from the NYPE 46
creation, vessels started to incorporate “Engine Logbooks” as well as the “Deck Logbooks”
already existing. Therefore, in this clause of the ASBATIME, it is stated that both must be
furnished to the Charterers if they are asked for.
Another clause altered to Charterers’ benefit is the Clause 15, “Off Hire”, since it indicates that
in case of loss of time due to vessel’s deficiency – or any cause related to any of the Owners’
responsibilities – not only the payment of the hire ceases, but also the overtime, if any.
Furthermore, it also included a paragraph stating that “should the vessel deviate during a voyage,
contrary to the orders of the Charterers, for any reason other than accident to the cargo, the hire
is to be suspended (…) until she is again in the same (…) position and the voyage resumed”,
including the cost of the fuel used during this time as well, which are hard conditions for the
Owners.
In Clause 17, “Arbitration”, a small technical change is done pointing out that “the arbitrators
shall be commercial men conversant with shipping matters”, making sure that these arbitrators
are experienced in the shipping business fields.
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Some other changes are also seen in Clause 19, in “General Average” section, since while in NYPE
46 the whole Clause talks about the “Carrier”, the ASBATIME always mentions the “Owners”,
preventing any exemption of their responsibilities. It also updates the York-Antwerp Rules to be
according to, from the 1024 to the newest 1974. To conclude with the changes in this Clause,
even it mentions the New Jason Clause, that is included in the Clause 23 instead of here.
In Clause 20, the “Drydocking”, some changes are notable too. Firstly, a place where the vessel
was last drydocked must be written down. Secondly, there is no “at least” indicated to drydock
the vessel, it must be always agreed between both parts; finally, at the most important change,
the place for the delivery of the vessel after her maintenance must be settled up.
In Clause 21, the “Cargo Gear”, a description of the same is to be freely included, without any
limitation of its lifting capacity. Then, another generational change is found, since “lanterns and
oil” are withdrawn – electricity is employed. Finally, it also states that any loss of time due to any
operative cargo gear will take the vessel off hire – protecting again the interests of the Charterer.
In Clause 22,” Crew Overtime”, the amount of $ to be paid for the crew overtime by the Charterer
must be specified.
In Clause 23, seen as “Clauses Paramount”, some notable changes are worth to be appreciated.
First, the subject of this charter party to “the Act of Congress of the United States of the 13th day
of February 1893 entitled “An Act relating to Navigation of Vessels, etc.”” is withdrawn due to its
old-fashioned aspect. Second, on the USA Clause Paramount, is stated that the Bill of Lading is
also subject to the Hague/Hague-Visby Rules – not created yet in 1946. Third, a bit small
paragraph is added at the end of the New Both-to-Blame Collision Clause. Fourth, the New Jason
Clause is included in this Clause 23, therefore is to be included in the Bill of Lading, something
that was not provided in the NYPE 46. Fifth, and last, War Clauses – not mentioned in the NYPE
46, are also described here and, as the New Jason Clause, to be added to the Bill of Lading.
In the Clause 25, it is stated that “the acts of pilots and tugs” are also Owners’ responsibilities,
among all the rest of them.
To conclude, the possibility to add some Rider Clauses is also observed at the end of the
ASBATIME, being those clauses attached at the end of the charter party. It is worth to say that
these collected Rider Clauses are those which were most frequently added in the NYPE 46,
written down and standardized.
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3.3.5 Conclusions
The ASBATIME was launched in June 12th, 1981 as a brand-new version of the NYPE charter party,
whose previous version dated from thirty-five years ago, on 1946, issued by the Association of
Shipbrokers and Agents of the USA (ASBA).
After analysing it, the first main visible update against the 46 version is its order and organisation.
In the ASBATIME, all lines in the preamble and all clauses are entitled to ease its recognition and
lecture.
Regarding the content of the charter party itself, even though some valuable additions are made
in many clauses, as for example in Clause 8 - “Bills of Lading”, in Clause 20 – “Drydocking” and
Clause 23 – “Clauses Paramount”, not many sonorous changes are found, following in the same
vein as in the NYPE 46. Nevertheless, small clarifications are made all along many clauses,
emphasizing some terms or even rectifying many others, most likely avoiding some
misinterpretations basing on past disputes.
On the other side, the addition of an appendix including the most Rider Clauses used until the
date, ordering and standardizing them, was a great update, since many other charter parties took
the benefit of this compilation to include it to them.
However, even these valuable additions and the inclusion of an appendix of Rider Clauses
seemed to be not enough to revendicate this version above the NYPE 46. The main reason for
that, as already explained at the beginning of this section of the ASBATIME, was that when this
new version was launched, both Owners and Charterers were used to another version for more
than thirty-five years, being available a huge scope of solved disputes which helped them to
perform a clear and concise interpretation of its clauses.
Even though many parties, as BIMCO and The General Council of British Shipping – known as The
Chamber of Shipping nowadays - of interest were consulted, its general pro-Charterer facet was
not altered. In addition, the goal of the ASBA was not to create a new entirely form but a revised
form, therefore clauses only occasionally negotiated were not included in the basic Charter
Clauses but in the attached Rider Clause attachment, which did not cover the real necessities of
the charter market.
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To sum up, the launch of the ASBATIME did not have the expected impact on the industry, not
because of its form or changes – some of them add valuable content, but because of the classical
– or conservative – mentality of the shipping industry, which was used to a simpler version with
similar characteristics, its additional clauses and its past disputes.
3.4 The NYPE 93
Even though the relative failure of the ASBATIME, the importance of the NYPE charter party as
one of the most commonly used time charters for dry cargo vessels was still present in the minds
of all brokers and shipowners all over the maritime market.
For that reason, on 1992, the Chartering and Documentary Committee of the ASBA decided that
a towering update this charter party was necessary. Therefore, together with BIMCO and the
Federation of National Associations of Ship Brokers and Agents (FONASBA), the mission of
undertaking a general revision of the ASBATIME – or NYPE 81 – was started considering the
market’s practice changes and the difference of ships currently used in order to create a workable
form that could have a positive reaction from the shipping business community.
Thus, the members of the ASBA, the BIMCO and the FONASBA worked together to improve this
new form, which main goal was to substitute the old and old-fashioned – even though still used
– NYPE 46, finally approving, on September 14th, 1993, and by all members involved in its
creation, the called NYPE 93.31
Regarding the form itself, it is easily noticeable that some changes are applied from the first
moment on. In this case, the charter party is divided into three sections: the preamble, the main
clauses and an Appendix A.
31 - The Association of Ship Brokers & Agents (U.S.A.); The Baltic and International Maritime Council; The Federation of National Associations of Ship Brokers and Agents. The NYPE 93 Time Charter party. New York: September 14th, 1993. Form available at: http://www.fleetle.com/a/d/pdf/nype_93.pdf.
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3.4.1 The preamble
The preamble of the NYPE 93 is quite shorter than the one of the previous NYPE form. In this
case, it is made up of only twenty-two lines organized into two clearly separate sections:
- Lines 1-8: stablish the date and place of conclusion of the contract and recognizes the Owners
and the Charterers that will be involved in this business.
- Lines 9-22: these lines are to perform a basic description of the vessel that will be employed.
Several terms are included in these lines as her name and flag, the year of building, number of
Registry and Class. It is also included her deadweight, measured in long or metric tons and limiting
the stores weight carried, on a saltwater draft indicated on summer freeboard. Furthermore, its
capacity is measured in both cubic feet grain and cubic feet bale space and its tonnage can be
chosen to be determined in GRT or, to conform to modern ship technology, in GT.
To conclude, the speed is measured in knots being the vessel “fully laden, in good weather
conditions up to and including maximum force (gap to be filled) on the Beaufort wind scale”,
detailing her consumption in long or metric tons and her combustible to be used.
The most interesting fact of this preamble is that, compared to the previous NYPE versions, it is
shorter and more synthesized. However, in order not to lose some further data about the vessel,
an Appendix A is provided. There, any required more detailed description of the vessel or
specification of the bunker oil to be supplied can be freely placed from line 530 on, right at the
end of the contract.
3.4.2 The main terms
The NYPE 93 contains a total of forty-five clauses, much more than any other previous NYPE form.
The reason of this number of clauses increase simple, but quite effective somehow – something
that will be explained in the conclusions of this sub-chapter.
- Clause 1 – Duration: previously included in the preamble of the previous NYPE versions, this
clause determines the period of time that the vessel will be hired. To avoid any dispute, it is highly
recommended to clearly specify this period of hire with the minimum margin possible.
- Clause 2 – Delivery: it details where “The vessel shall be placed at the disposal of the
Charterers…” and points out that she “shall be ready to receive cargo (…) and in every way fitted
for ordinary cargo service”.
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Furthermore, it is determined the minimum “days notice of expected date of delivery” that the
Owners shall give the Charterers.
It is worth saying that, as well as the Clause 1, this clause always appeared in the preamble of the
previous NYPE versions.
- Clause 3 – On-Off Hire Survey: this clause, never included in the main terms of the NYPE but in
the Rider Clauses of the ASBATIME, explain that both at delivery and redelivery time “the parties
shall (…) each appoint surveyors”, whose mission is to perform a joint survey of the vessel to
evaluate her state, her deficiencies so far appreciated and the quantity of bunkers remaining on
board. Once the survey is concluded, “a single report shall be prepared on each occasion and
signed by each surveyor”, filling a separate report in case of any of the item have not been agreed.
It is also stated that in case of failing to the attention of the survey or the report’s signature,
“such party shall nevertheless be bound for all purposes by the findings in any report prepared by
the other party”.
- Clause 4 – Dangerous Cargo/Cargo Exclusions: as the Clause 1 and 2 of this NYPE 93, its terms
were always included in the preamble of the previous NYPE versions. However, this clause is
found split into two sections:
a) Corresponding to the cargo exclusions, this sub-clause states that the vessel shall be
employed to carry lawful cargo, excluding any dangerous or similar cargo “unless carried
in accordance with the requirements (…) of the competent authorities of the country of
the vessel’s registry and of ports of shipment and discharge and of any intermediate
countries or ports through whose waters the vessel must pass”.
In addition, the following cargo is excluded: livestock, arms, ammunition, explosives,
nuclear and radioactive materials, as well as leaving some lines to fill with more banned
cargo in this contract.
b) For cargo classified as IMO, this sub-clause gives the possibility of limiting the quantity to
be transported agreed between the parties, most likely due to hull insurances policies set
a limit on the amounts of this type of goods. Furthermore, it stablishes that “the
Charterers shall provide the Master with any evidence (…) to show that the cargo is
packed, labelled, loaded and stowed in accordance with IMO regulations”, giving the
Master the power to refuse or unload it at Charterer’s expenses.
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- Clause 5 – Trading Limits: this clause defines the trading limits within the vessel must operate,
leaving also blank line s to fill the excluded areas “as the Charterers shall direct”.
- Clause 6 – Owners to Provide: this clause states all the aspects the Owner must provide to the
Charterer in order to accomplish with the contract, all of them related to the readiness of the
vessel such as “insurance (…), all provisions, cabin, deck, engine-room, (…) stores, including boiler
water…”; her proper maintenance “shall maintain vessel’s class and (…) efficient state in hull,
machinery and equipment…” and other expenses such as “wages, consular shipping and
discharging fees (…) and port services pertaining to the crew”.
- Clause 7 – Charterers to Provide: opposite to the Clause 6, here are detailed every single duty
of the Charterers, who “shall provide and pay for all the bunkers (…) port charges (…), all
communication expenses pertaining to the Charterers’ business at cost, pilotages, towages,
agencies, commissions, consular charges (…), and all other usual expenses except those stated in
Clause 6…”.
However, it is pointed out that if “the Vessel puts into a port for causes for which the Vessel is
responsible (other than by stress of weather)” or any fumigation “because of illness of the crew”
will be for the Owners’ account. Regarding the aforesaid fumigations, if they are ordered
“because of cargoes carried or port visited while the vessel is employed under this Charter Party”
or any other fumigation if the vessel “has been on charter for (…) six months or more” shall be
into account of the Charterers.
In the final lines of this clause, it is explained that “necessary dunnage and also any extra fittings”
shall be provided and paid by the Charterers, “but the Owners shall allow them the use of any
dunnage already aboard the Vessel”. Nevertheless, the Charterers must remove all these
materials prior to redelivery.
- Clause 8 – Performance of Voyages: this clause, as the Clause 4, is divided into two subsections:
a) It is explained that “the Master shall perform the voyages in due dispatch and shall
render customary assistance with the Vessel’s crew”. In addition, it is pointed out that
he must be “conversant with the English language”, which was had never being seen
in any previous NYPE form. Furthermore, the Master is also appointed to supervise all
cargo operations – even though the Charterers are responsible to perform them.
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b) In this sub-clause, it is given the possibility to the Charterers to complain to the
Owners in case they “shall have reasonable cause to be dissatisfied”, being the
Owners obliged to investigate this issue.
- Clause 9 – Bunkers: this clause is again divided into two subsections as follows:
a) In this first subsection, it is fixed the exact quantity of fuel and diesel oil the Owner
must deliver the vessel to the Charterers and the price per ton of each bunker type,
being the same applied to the Charterer when redelivering the vessel to the Owner.
Quantities can be defined in metric or long tones, but the same measurement unit
must be used throughout all the clause.
b) This second subsection is used to point out that “the Charterers shall supply bunkers
of a quality suitable for burning in the Vessel’s engines and auxiliaries”, referring to
the specifications included in the Appendix A.
Furthermore, in this second subsection, it is reserved the right of the Owners “to
make a claim against the Charterers for any damage to the main engines or the
auxiliaries caused by the use of unsuitable (…) fuels not complying with the agreed
specification(s)”. Additionally, the Owners are not to be held responsible for any loss
of speed, consumption increase or time lost due to any unsuitable fuel supplied.
- Clause 10 – Rate of Hire / Redelivery Areas and Notices: in this clause, two slightly different
options are given to specify the hire: a fixed rate per day in US Dollars or a fixed “United States
Currency per ton on vessel’s total deadweight carrying capacity, including bunkers and stores, on
(…) summer freeboard, per 30 days…”.
After that, it is also stated that the “redelivery in like good order and condition, ordinary wear
and tear excepted, (…) at (place of redelivery) unless otherwise agreed”. It is given the Charterer
the odd to deliver the vessel in another “probable” port, giving to the Owner the vessel’s
expected date of redelivery with a fixed amount of notice days in advance.
To conclude, it is highlighted that for “hire calculations, the times of delivery, redelivery or
termination of Charter shall be adjusted to GMT”.
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- Clause 11 – Hire Payment: this clause is divided into four sub-clauses as follows:
a) Payment: it must be detailed where the hire shall be made and received as well as the
currency – even though the United States Currency is still provided. It is also described
how “…15 days in advance, and for the last half month or part of the same the
approximate amount of hire”. In addition, it is detailed that this payment should “not
cover the actual time, hire shall be paid for the balance day by day as it becomes due, if
so required by Owners” and “failing the punctual and regular payment of the hire, (…), the
Owners shall be at liberty to withdraw the vessel from the service of the Charterers”.
To conclude, this sub-clause states that once expired the grace period – which is provided
in the sub-clause 11 (b) – “the Owners shall (…) be entitled to withhold the performance
of any (…) of their obligations and shall have no responsibility whatsoever for any
consequences thereof”, adding that the hire must not be stopped and any extra expenses
due to this event shall be into account of the Charterers.
b) Grace Period: for the first time in any NYPE form, this term is included into a Main Clause
instead of a Rider Clause, as in the ASBATIME. Its meaning is no other than when there is
a failure of the punctual payment of the hire by the Charterers “due to oversight,
negligence, errors or omissions” an agreed amount of banking days are given on behalf
of the Owners to rectify this failure.
c) Last Hire Payment: it explains that, being the last voyage of the employed vessel before
redelivery, the penultimate payment of hire “is to be made for such length of time (…) as
being the estimated necessary to complete the voyage, (…) bunkers on board (…) and
estimated disbursements for the Owners’ account before redelivery”. In case of any
difference, the same must be balanced by the pertinent part.
d) Cash advances: regarding any non-prevised expenses, it is detailed that “Cash for vessel’s
ordinary disbursements at any port may be advanced as required by the Captain , by the
Charterers or their Agents, subject to 2.5% commission and such advances shall be
deducted by the hire”. However, it is pointed out that “The Charterers shall in no way be
responsible for the application of such advances” giving somehow an advantage to the
Charterers.
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- Clause 12 – Berths: it states that any place the vessel will call, as per Charterer or Agents
decision, must be safe and “provide the vessel can safely lie always afloat at any time of tide”.
- Clause 13 – Spaces available: this clause is again divided into two sub-sections:
a) This sub-clause explains that all usual places of loading and also accommodations for
supercargo, if carried, must be at the Charterers’ disposal. On the other side, “sufficient
space for ship’s officers, crew, tackle, apparel, furniture, stores and fuel” shall be reserved.
b) The second sub-clause is brand-new for the NYPE charter party, stating that in case of any
loss, damage or liability caused by cargo carried on deck, the “Owners are to be and are
hereby indemnified by the Charterers”.
- Clause 14 – Supercargo and Meals: this clause gives the Charterers the possibility to appoint a
Supercargo, whose aim is to “accompany the vessel at the Charterers’ risk and see that voyages
are performed with due dispatch”, paying an agreed rate left in blank per day.
In addition, it is also written that the “Owners shall victual pilots and custom officers”, but also,
if the Charterers give permission, “shall victual tally clerks, stevedore’s foreman, etc.” for a rate
left in blank per meal, which will be paid by the Charterers.
- Clause 15 – Sailing Orders and Logs: as in all previous versions of the NYPE, it explains that the
Charterer “shall furnish the Captain (…) all requisite instructions and sailing directions in writing”
and provide “the Charterers, their Agents or Supercargo (…) with a true copy of daily Logs”. These
logs – both deck and engine - must detail all data concerning “the course of the vessel, the
distance ran and the consumption of bunkers.”. It is important to remark that all copies and
extracts of the Logs must be written in English, as well as all instructions and sailing directions
given by the Charterers.
- Clause 16 – Delivery / Cancelling: in this clause, the Charterers must fill a blank space which will
indicate the commence time of the contract. Additionally, a cancelling option is also given to
them if the Vessel is not ready for delivery on or before an indicated time.
Moreover, another paragraph entitled “Extension of Cancelling” is included in this clause. Found
as the Rider Clause 28 in NYPE 81, it gives the Owners the opportunity to “require the Charterers
to declare whether or not they will cancel the Charter” if they know well in advance that “the
vessel will not be ready for delivery by the cancelling date (…) and are able to state (…) the date
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on which the vessel will be ready”. In case the Charterers do not cancel the charter before two
days after Owners’ advise – or they fail to reply, then “the seventh day after the expected date of
readiness for delivery (…) shall replace the original cancelling date”.
This kind of clause, commonly known as Interpellation Clause, was introduced to allow Owners
to minimize their losses in cases where, even “the exercise of due diligence”, they can ascertain
the vessel will not be ready in due time since they are legally obliged to tender their vessel to any
port only to be cancelled and avoid a spot prompt vessel.
- Clause 17 - Off Hire: this clause states that, during any loss of time due to any damage or
deficiency of the ship “unless (…) is caused by events for which the Charterers, their servants,
agents or subcontractors are responsible (…) or by average accidents to the vessel or cargo unless
resulting from inherent vice, quality or defect of the cargo, (…), the payment of the hire and
overtime (…) shall cease for the time thereby lost”.
It is also included that “should the vessel deviate during a voyage, contrary to the orders of the
Charterers, for any reason other than accident to the cargo, the hire is to be suspended (…) until
she is again in the same (…) position and the voyage resumed”.
Furthermore, it is included that all bunker – instead of the mentioned “fuel” detailed in the
ASBATIME, used during this time is to be paid by the Owners, since the vessel is off hire, being
appreciable the strong aim of the Charterers to avoid any extra expense caused by something
which is not under their responsibilities.
- Clause 18 – Sublet: as the first clauses of this charter party, the terms of this one where included
in the Preamble of the previous NYPE forms. However, the meaning does not change in any
sense, since it keeps giving the Charterer the “liberty to sublet the vessel” during any part of the
contract, stating also that “Charterers shall remain responsible for the fulfillment of this charter”,
hugely empowering this party by allowing them to become a new Owner for the subsequent sub-
Charterer, being the responsible of filling the charter party as well.
- Clause 19 – Drydocking: at the beginning of this clause, the last drydock date must be indicated.
Then, two options are given to the parties from where one must be chosen as follows:
a) It can be agreed between the Owners and the Charterers to “place the Vessel in drydock
(…) at a convenient time and place (…) for bottom cleaning and painting and/or repair as
required by class or dictated by circumstances”.
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b) No drydocking allowed during the contract – except in case of emergency.
- Clause 20 - Total Loss: in case of losing the vessel, “money paid in advance and not earned shall
be returned to Charterers”.
- Clause 21 – Exceptions: this clause, included in the “Total Loss Clause” in the previous NYPE
versions, enumerates several events, which are not possible to be predicted, to be “always
mutually excepted”.
- Clause 22 – Liberties: as the previous clause, this term was included in the “Total Loss Clause”
in the ASBATIME, giving the vessel the liberty “to sail with or without pilots, to tow and to be
towed, to assist vessels in distress, and to deviate for the purpose of saving life and property”.
Thus, the Owners have here allowance to perform the nautical management in special cases
without necessity of any express permission of the Charterers.
- Clause 23 – Liens: this clause, as in all previous NYPE forms here analyzed, exposes that the
Owner “shall have a lien upon all cargoes (…) and all sub-freights” and the Charterer “to have a
lien on the Vessel for all moneys paid in advance and not earned”.
In a second paragraph, it is announced that “The Charterers will not directly or indirectly suffer
(…) any lien or encumbrance, which might have priority over the title and interest of the Owners
in the Vessel.”.
Nevertheless, a protective measure for the Owners is found at the end of this clause by declaring
that “The Charterers will not procure any supplies or necessaries or services (…) on the credit of
the Owners or in the Owners’ time”.
- Clause 24 – Salvage: same as in the previous NYPE forms analyzed, this clause states that “All
derelicts and salvage shall for Owners and Charterers equal benefit”.
- Clause 25 – General Average: this clause is, compared to the previous NYPE versions, much
simplified, being the parties freer on their agreement. Even though the General Average is still
to “be adjusted according to York-Antwerp Rules 1974, as amended 1990, or any subsequent
modification thereof”, the place and the currency is left blank for its settlement.
In addition, it is pointed out that “all bills of lading issued (…) will contain a provision to the effect
that general average shall be adjusted according to York-Antwerp Rules 1974, as amended 1990,
(…) and will include the New Jason Clause as per Clause 31”.
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To conclude, it is detailed that the Hire “shall not to contribute to general average”.
- Clause 26 – Navigation: this clause insists that “the Owners shall remain responsible” of
everything related to the nautical management, something quite reasonable due to the nature
of the same charter party.
- Clause 27 – Cargo Claims: in case of any related to the cargo “shall be settled in accordance with
the Inter-Club New York Produce Exchange Agreement of February 1970, as amended May 1984,
or any subsequent modification”.
- Clause 28 – Cargo Gear and Lights: as in the ASBATIME, it states how the Owners shall keep the
cargo gear as in the blank spaces to be filled up with its description. It also tells that Owners must
provide all lights on board for night work, but “additional lights (…) shall be at Charterers’
expense”.
It is important to highlight that if there is any cargo gear inoperative, “the vessel is to be
considered to be off hire to the extent that time is actually lost”, being the Owners responsible of
any extra expenses that could arise from it. However, this would not apply in case that “such
disablement or insufficiency of power is caused by the Charterers’ stevedores”.
- Clause 29 – Crew Overtime: in case of any extra work of the crew, the Charterers are to pay a
fixed amount of $ per month or pro rata “concurrently with the hire”.
- Clause 30 – Bills of Lading: this clause is divided into three sub-clauses as follows:
a) It is explained that the Master is in charge of signing the bills of lading or waybills.
However, “with the Owners’ prior written authority”, the Charterers are also entitled to
sign them.
b) Following the line of the previous sub-clause, in case of “any inconsistency between this
Charter Party and any bills of lading or waybills signed by the Charterers or the Master at
their request”, the Charterers shall indemnify the Owners “against all consequences or
liabilities”.
c) This third sub-clauses basically frees the Owners and the ship of any responsibility
regarding the cargo carried on deck, quoting the exact clause the cargo documents must
have written.
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- Clause 31 – Protective Clauses: called “Paramount Clauses” in the ASBATIME, this clause
provides five clauses – listed from “a” to “e” – of which the charter party is subject to and which
must be included in all bills of lading and waybills as follows:
a) Clause Paramount: it is explained that all bills of lading must include a clause which
bounds them to “the Carriage of Goods by Sea Act of the United States, the Hague Rules,
the Hague-Visby Rules, (…) or such other similar national legislation” depending of the
origin or destination of the bills of lading.
b) New Both-to-Blame Collision Clause: distributes indemnifying responsibilities with third
parties in case of losses or liabilities due to a collision during the charter.
c) New Jason Clause: states that in case the carrier is not responsible to any damage
occurred before or after starting the voyage, any other part involved in the charter will
contribute with the carrier in general average expenses.
d) U.S. Trade-Drug Clause: this clause makes the Charterers responsible of the prevention of
“narcotic drugs and marijuana to be loaded or concealed on board the Vessel”, holding
the Owners and the crew indemnified at any claims and the release of the vessel in case
of any arrest. However, Owners shall be responsible if these substances are found in
possession of vessel’s personnel.
e) War Clauses: as per this clause, the vessel shall not navigate nor enter at any war zone,
except allowed by the Owner. If such allowance is received, Charterers are to pay for any
extra insurance as well as additional cost of wages and insurance for the crew.
Furthermore, and newly introduced in this NYPE 93 form, was bonuses to the crew are
on Charterers account.
Clause 32 – War Cancellation: this Clause prevents the Charter if a war outbreaks between two
or more countries that both parts can agree on. In case this situation takes place, the vessel is to
be redelivered by the Charterers depending whether she has cargo on board or not. However,
the hire must keep being paid and “except as aforesaid all other provisions of this Charter shall
apply until redelivery”.
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- Clause 33 – Ice: this clause explains that the vessel “shall not be required to enter in any icebound
port or area (…) where there is risk (…) the vessel will not be able on account of ice to safely enter
or remain in the port or area or to get out”. However, if the Owners approve, the vessel can follow
ice-breakers if required.
- Clause 34 – Requisition: this Clause states that if “the vessel be requisitioned by the government
of the vessel’s flag during the period of this Charter”, the vessel is to proceed off hire and, in case
of being paid by the foresaid government, it shall be “retained by the Owners”. However, the
period of the Charter during the requisition will keep counting, and if exceeds an agreed quantity
any of the parts can cancel the charter party with no claims.
- Clause 35 – Stevedore Damage: in case this situation happens, “the Charterers shall pay for any
and all damage to the Vessel caused by stevedores”. For that, the Master has 48 hours since it
has been produced to notify, in writing, the Charterers or their Agents of any damage so far
discovered, appointing a surveyor to assess the extent the damages if necessary.
After this, the clause is divided into two sub-clauses:
a) This first sub-clause specifies that, in case these damages affect anything related to the
nautical management of the ship or her “trading capabilities”, they must be repaired
immediately by the Charterers at their own expense keeping the vessel on hire until
b) Contrary to the previous point, any damage not specified above “shall be repaired at the
Charterers’ option, before or after redelivery concurrently with the Owners’ work”. In this
case, only the time and the expenses for the repairs “for which the Charterers’ are
responsible” will exclusively paid to the Owners.
- Clause 36 – Cleaning of Holds: in case that the holds need to be cleaned between voyages or
cargoes, Charterers are to pay an extra at a fixed rate per hold. However, the Owners are
exempted of any claim or responsibilities in case the holds are not accepted for loading any cargo.
To conclude, it is given the Charterers the option to redeliver the vessel “with unclean/unswept
holds” by paying a fixed rate to compensate the cleaning.
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- Clause 37 – Taxes: this clause obliges the Charterers to pay all taxes related to the vessel, the
cargo, the freights, the sub-freights and the hire during the duration of the contract as well as
after its currency. Nevertheless, “taxes levied by the country of the flag of the Vessel or the
Owners” are excluded to the Charterers.
- Clause 38 – Charterers’ colors: if required by the Charterers’, it is permitted the privilege of
“flying their own house flag and paint the vessel with their own markings”. However, the vessel
must be repainted prior redelivery at Charterers’ own expenses and time costs.
- Clause 39 – Laid Up Returns: it is explained that “Charterers shall have the benefit of any return
insurance premium receivable by Owners (…) by reason of vessel being in port fir a minimum
period of 30 days” in case the vessel is on hire or pro rata for the time on hire.
- Clause 40 – Documentation: the Owners’ are obliged to provide the Charterers any required
documentation to allow the vessels’ trading within the agreed limits of the contract, detailing –
but not limiting – some of them as the “certificates of financial responsibility for oil pollution,(…),
tonnage certificate,(…), certificate of registry…” etc.
- Clause 41 – Stowaways: this brand-new clause prevents the presence of undesired stowaways
in the vessel. For that, it is divided into two sub-clauses:
a) Divided into three different points:
i. Expresses that the Charterers must take care and all necessary means to avoid the
presence of the aforementioned stowaways.
ii. It basically points out that, in case any stowaway gains access to the vessel by
means of the cargo shipped on board, the Charterers are to be considered
responsible of any consequences , claims and fines, holding “the Owners harmless
and (…) indemnified against all claims” whilst “the Vessel shall remain on hire”.
iii. In case the above sub-clause takes place and the Vessel is arrested, “the Charterers
shall take all reasonable steps to secure that (…) the Vessel is released”.
b) Now divided into two points:
i. Contrary to the previous sub-clause, in case the stowaways gain access to the
vessel by different means of the ones mentioned above – nothing related to the
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cargo – the Owners shall be considered liable for “all time lost and all expenses,
(…), including fines (…) and the Vessel shall be off hire”.
ii. Exactly the contrary as the point “iii” of the previous sub-clause, in case the
situation above explained ever happened and the vessel is arrested, the Owners
shall be considered in charge of releasing her.
- Clause 42 - Smuggling: in case the crew commits any contraband, the vessel is to be considered
off hire for any time lost and the Owners “shall bear the cost of any fines, taxes or imposts”.
- Clause 43 – Commissions: it is fixed the exact quantity of commission the Owners and vessel
will pay to whichever broker “on hire earned and paid under this Charter, and also upon any
continuation or extension…”.
- Clause 44 – Address Commission: fixes the amount of address commission and who will earn it.
- Clause 45 - Arbitration: in addition to the city of New York, it is given the chance – never seen
before – to resolve any dispute in the city of London by choosing between one of the options:
a) NEW YORK: being subject to the US Law, three arbitrators are to be appointed – one of
each party and the third between the two so-chosen. It is also pointed out that “their
decision (…) shall be final and (…) this agreement may be made rule of the court”.
In addition, these men shall be commercial and “conversant with shipping matters”,
conducting the arbitration “with the Rules of the Society of Maritime Arbitrator Inc”.
To conclude, if the amount claimed does not exceed an agreed quantity, then “the
arbitration shall be conducted in accordance with the Shortened Arbitration Procedure of
the Society of Maritime Arbitrators Inc”.
b) LONDON: even though it gives the option to nominate a single arbitrator if the parties
agree, they can also nominate one arbitrator each who is to be “carrying on business in
London and who shall be members of the Baltic Mercantile & Shipping Exchange and
engaged in Shipping”. Its decision shall always be governed by the English Law.
As in the sub-clause before “a)” above explained, if the quantity claimed does not exceed
a fixed amount, “the arbitration shall be conducted in accordance with the Small Claims
Procedure of the London Maritime Arbitrators Association”.
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3.4.3 Comparison between ASBATIME and the NYPE 93
After having analyzed the whole NYPE 93, many changes and updates were made from the
previous NYPE form, dated from 1981 and also known as ASBATIME – as explained in the previous
chapter.
The first of these changes was the organizations that took part in the revision of the NYPE 81 to
produce the aforementioned NYPE 93 form. Whereas the previous NYPE forms were only
designed and approved mainly by Charterers association, a contrary-side organization was
involved in this revision: the BIMCO. Thus, the aim of the collaboration of the BIMCO in this
update was no other than a more well-balanced contract, far from any kind of abuse or clear
favoritism to any of the parts, to achieve a wider acceptation and use around the shipping
market.
Looking into the contract itself and beginning with the preamble, it is easily appreciable that the
NYPE 93’s is much shorter that the ASBATIME’s one. The reason for that was that, at the time of
the revision, it was found that many concepts were brought together in the preamble, being
some of them independent between each other, so the decision of taking them out, separating
them and sorting them into different clauses was taken. As a result of that, the NYPE 93’s
preamble includes a total of 22 lines whereas the preamble of the ASBATIME included a total of
62.
Nevertheless, this shortage of lines in the preamble did not mean a missing of important
information in the contract. Even though in the NYPE 93’s preamble only a summary of the date,
identification of the Owners and the Charterers and a brief – although quite complete –
description of the vessel is included, the line 22 refers to a so-called “Appendix A”, endorsed at
the end of the contract, where the parts can perform a further detailed description of the vessel
if it is required.
Regarding the main terms, there is also a clear difference of the amount of the clauses: the
ASBATIME included 27 clauses plus 11 more of the Rider Clauses Appendix whilst the NYPE 93
form had 45 clauses. To achieve this increase of clauses, three different methods were used:
transferring some of them from the preamble; moving some others from the Rider Appendix and
simply creating new ones.
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Starting with the first abovementioned method, the content of the Clause 1 “Duration”, the 2nd
“Delivery”, the 4th “Dangerous Cargo/Cargo Exclusions” the 5th “Trading Limits” and the 18th
“Sublet” was extracted from the preamble of the ASBATIME and sorted into those clauses. The
are only a couple of changes between them, both found in the Clause 4: the first one, in the
section “a”, the “nuclear and radioactive material” is included in the list of the cargo specifically
included; the second one is the whole section “b” of this clause, where the possibility to limit the
quantity of cargo classified as IMO to be transported between the parties is given - most likely
due to hull insurances policies set a limit on the amounts of this type of goods.
The second method, which was to move some clauses from the Rider Clauses Appendix,
concluded into a total of six new clauses and two sections of another already present clauses as
follows:
- Clause 3 – On-Off Hire Survey: being the Clause 34 of the Rider Clauses Appendix, not
much changes were made at the time of including it in the main terms of the NYPE 93
since it is only specified that the survey has “the purpose of ascertaining quantity of
bunkers on board and the condition of the Vessel”.
- Clause 11 – Hire Payment: the sub-section “b” of this clause corresponds to the Clause 29
of the Rider Clauses Appendix, called the “Grace Period”. However, some changes are
made in this clause in the NYPE 93 form: firstly, it is specified that the failure of the
payment of the hire shall be “due to oversight, negligence, errors or omissions”; secondly,
instead of two clear banking days to rectify the failure, a blank space is given so that the
parts can agree this number of banking days; thirdly, the 0,1% per day of commission to
be received by the Owners in case of using this grace period is removed.
- Clause 16 – Delivery/Cancelling: in this clause it is included a paragraph called “Extension
of Cancelling”, which corresponds to the Clause 28 of the Rider Clauses Appendix. There
is only one small change right at the beginning of the clause, where it is stated that the
Owners have to warrant the exercise of due diligence.
- Clause 27 – Cargo Claims: corresponding to the Clause 27 of the Rider Clauses Appendix,
this clause is widely changed from one form to the other since instead of distributing
responsibilities depending on the causes of the claims, states that it “shall be settled in
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accordance with the Inter-Club New York Produce Exchange Agreement of February 1970,
as amended May 1984, or any subsequent modification” which is self-explanatory.
- Clause 31 – Protective Clauses: in the section “e” sub-section “IV” of this clause, it is found
the “War Bonus” corresponding to the Clause 32 of the ASBATIME’s Appendix.
- Clause 32 – War Cancellation: being the Clause 31 of the Rider Clauses, this one allows
the Owners and the Charterers to agree between which countries the war must be
between, without involving the flag nation the vessel is navigating under.
- Clause 34 – Requisition: corresponding to the Clause 33 of the ASBATIME’s Appendix, this
clause was kept the same.
- Clause 35 – Stevedore Damage: even though this clause is included in the NYPE 81’s
Appendix as the Clause 35 as well, it is changed in many parts. First of all, makes the
Charterers to pay for all damages caused by stevedores and extends another 24 hours the
time the Master disposes to give them a written notice of these damages, providing also
the option to the Charterers to appoint a surveyor to determine the severity of the
damages.
Depending on this severity and how they affect the vessel, these damages are sorted into
two groups:
a) In case these damages affect anything related to the nautical management of the ship
or her “trading capabilities”, they must be repaired immediately by the Charterers at
their own expense keeping the vessel on hire until
b) Contrary to the previous point, any damage not specified above “shall be repaired at
the Charterers’ option, before or after redelivery concurrently with the Owners’ work”.
In this case, only the time and the expenses for the repairs “for which the Charterers’
are responsible” will exclusively paid to the Owners.
- Clause 38 – Charterer’s Colors: this clause corresponds to the Clause 36 of the Rider
Clauses Appendix and is kept equal.
- Clause 39 – Laid Up Returns: corresponding to the Clause 37 of the ASBATIME’s Appendix,
the only change made in this clause is the title since it was previously called “Return
Premium”.
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Regarding the third and last method, a total of five new clauses were added in this NYPE version.
Even though most of them were not brand-new in terms of invention – they came from other dry
cargo already existing contracts – they offered new perspectives and gave more inclusivity to
NYPE 93. This newly included clauses were the followings:
- Clause 36 – Cleaning of Holds: since the majority of the vessel which are supposed to be hired
under the terms of this contract shall be general cargo ships, the goods to be transported by
them can be very different from one voyage to another e.g. scrap metal, carbon, wood, etc. Due
to this cargoes’ diversity, holds must usually be cleaned between two subsequent voyages, and
since the Charterers’ are responsible about anything related to the cargo it shall also be their
responsibility to keep the holds clean – or pay for it.
It is also worth saying that most of the contracts nowadays detail the cargo carried in the last
three voyages of the vessel that will be hired.
- Clause 37 – Taxes: there is no mention in the ASBATIME nor NYPE 46 of this term, which is added
in this version in a far equidistant manner to deal between the Owners and the Charterers.
- Clause 40 – Documentation: even though this clause seems quite obvious, no obligation was
made to the Owners to provide any documentation of the vessel that Charterers may require for
trading. It is very interesting to mention that, as per this Clause, the vessel shall have valid “Suez
and Panama tonnage certificates”, since even they might be employed around these areas did
not mean that they are able to use the passage around this canals in the previous forms.
However, all these problems seem to be solved with the inclusion of these lines.
- Clause 41 – Stowaways: as an increasing problem around the shipping trade, which was by that
time reported by many of the contemporary press, a clause considering this problem was needed
to be incorporated in such a modern charter party. By the addition of this Clause, a well-balanced
dealing of risks and costs is made between both parts although these incidents shall be treated
case-by-case.
- Clause 42 – Smuggling: as a consequence of many contraband cases made by crews, this clause
needed to be added to prevent any damage to the Charterers and/or their interests.
By combining these three different methods above explained, eighteen new clauses and two sub-
clauses were included from the ASBATIME when developing the NYPE 93 form, completing its
widening and embracing more topics which had been left apart in the previous form.
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In addition to all the new clauses explained, almost all the rest of the shared clauses between the
ASBATIME and the NYPE 93 suffered changes. Whereas some of them were only small remarks
to precise the sense and avoid any misinterpretation, some others were highly remodeled to
update them according to the current and modern times – those clauses with bigger changes will
be explained herein after:
- Clause 7 – Charterers to Provide: some terms are added in this clause such as “The Charterers
(…) shall pay for port charges (including compulsory watchmen and cargo watchmen and
compulsory garbage disposal, all communication expenses pertaining to the Charterers’ business
at cost” and excludes the “stress of weather” as one of the causes for which the Vessel is
responsible to be put into a port.
It also points out that the Charterers, in addition to provide necessary dunnage for the cargo,
shall also “pay” for it, as well as that “Prior to redelivery the Charterers shall remove their dunnage
and fittings at their cost and in their time”.
After analyzing these changes involving the Charterers obligations, it is not difficult to conclude
that the participation of the BIMCO – and association basically formed by Owners – tried to
balance this charter party by hardening these clauses – between some others.
- Clause 8 – Performance of the Voyages: even though it is not a big change, it is added that the
Master “shall be conversant with the English language”, mainly included to ease the
communication between the Charterers and the crew due to, between other factors, the arose
of the third countries’ crew members.
It is also included that the Charterers, apart from performing all cargo handling, shall also perform
its “loading, stowing, trimming, lashing, securing, dunnaging, unlashing, discharging and tallying,
at their risk and expense” – something that can be related to the hardening explained on the
previous clause.
- Clause 9 – Bunkers: it is very important to take into account the sub-section “b)” of this Clause,
which had never been before included in any previous NYPE form. In it, it is explained that “The
Charterers shall supply bunkers of a quality suitable for burning in the Vessel’s engines and
auxiliaries” and basically holds them responsible for any damages of the engines due to the
supplying of any unsuitable bunker.
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- Clause 11 – Hire Payment: as explained in the analysis of the NYPE 93 form, this clause states
that being the last voyage of the employed vessel before redelivery, the penultimate payment of
the hire “is to be made for such length of time (…) as being the estimated necessary to complete
the voyage, (…) bunkers on board (…) and estimated disbursements for the Owners’ account
before redelivery” and in case of finding any difference, the same must be balanced by the
subsequent part.
To conclude, this clause basically tries to adjust the remaining hire to be paid by the Charterers
to the Owners with the duration of the last voyage the vessel will perform.
- Clause 13 – Spaces available: a “b)” sub-section is created due to the possibility of the vessel to
carry cargo on deck – as a container ship, for example, may be able to do.
- Clause 15 – Sailing orders and Logs: as in the clause 8, it is insisted in the English language to be
the communication channel between the crew and the Charterers, being a sign of internalization
of this charter party.
- Clause 17 – Off Hire: when enumerating the causes of any loss of time of the vessel, the “strike
of officers and crew” is added as well as the “detention by arrest of the Vessel” – even though it
is detailed that “unless such arrest is caused by (…) the Charterers”. In addition, the term “fuel”
in changed to “bunker” during the whole paragraph.
- Clause 20 – Total Loss; Clause 21 – Exceptions; Clause 22 – Liberties: this clauses are all extracted
of the three different paragraphs of the Clause 16, even though their content is exactly the same
as the included in the ASBATIME – proving the major organization of this form.
- Clause 30 – Bills of Lading: the term “waybills” is added to the paragraph every time the bills of
lading are mentioned as well as the sub-clause “c” – already explained before. It is also important
to highlight that, if the Charterers are to sign the bills of lading or waybills on behalf of the Master,
the authority must be written down.
- Clause 33 – Ice: at the end of this Clause, it is allowed that the Vessel follows the course of ice-
breakers – always with the vessel’s approval.
However, even these slight changes, five clauses are to be pointed out due to their huge reform:
- Clause 19 – Drydocking: even though the Clause starts similar as in the ASBATIME – indicating
when the vessel was last drydocked – then a choice between two sub-clauses must be done.
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The sub-section “a)” text is quite the same as in the NYPE 81, but the sub-section “b)” provides a
brand-new possibility of not allowing the drydocking during the charter.
Nevertheless, the hire suspension during any drydocking period is withdrawn, setting a more
unbalanced position between the two choices that can be made in this Clause.
- Clause 25 – General Average: first of all, it is important to remark that the text regarding
General Average is taken out of the “Salvage” Clause and set into its own clause.
Secondly, instead of widening this Clause, it is surprisingly highly simplified providing much more
understanding to the actions to be taken when a case of General Average happens. In this case,
it only mentions that any General Average case shall “be adjusted according to York-Antwerp
Rules 1974, as amended 1990, or any subsequent modification thereof”, leaving the place and
the currency in blank.
Furthermore, something quite similar is explained in the following paragraph since “all bills of
lading issued (…) will contain a provision to the effect that general average shall be adjusted
according to York-Antwerp Rules 1974, as amended 1990, (…) and will include the New Jason
Clause as per Clause 31”.
At the end of the Clause, it is pointed out that the Hire “shall not to contribute to general
average”.
To conclude, this Clause arose many disputes in the past mainly due to its mistakable and
confusing redaction, therefore a deep revision was needed to be done, finding its solution into
the worldwide accepted York-Antwerp Rules 1974 and their 1990’s amendment.
- Clause 31 – Protective Clauses: divided into five sub-clauses, this Clause is quite similar as in the
ASBATIME with, basically, two changes.
The first of these two changes was the inclusion of the protective clause “U.S. Trade – Drug
Clause”. After the publication of the U.S. Anti Drug Abuse Act 1986, five years after the
publication of the ASBATIME, and with the arose of these illegal substances’ trade by taking the
benefit of the many options that maritime transport offered, the inclusion of this Clause was
highly necessary in a modern form of charter party.
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Nevertheless, this Clause deals with the responsibilities of finding this kind of substances on
board in a very general but far effective way: if any narcotic drugs or marijuana is found in the
cargo transported by the vessel, Charterers shall hold all responsibilities; on the other side, in
case of being found in possession of any crew member, Owners are to deal with any legal claim.
The second change, explained a bit before in this comparison, is found in the section “e” sub-
section “IV” of this clause, where the “War Bonus” term, corresponding to the Clause 32 of the
ASBATIME’s Appendix is included.
- Clause 45 – Arbitration: this Clause is the last including major changes that will be explained in
this comparison.
Right at the beginning of it, two options are provided, where the parties shall choose among
them:
a) NEW YORK: this option is quite similar as the Clause 17 of the ASBATIME, only mentioning
that any Arbitration must follow the rules of the Society of Maritime Arbitrators and
including a final statement where, if the total claimed by either party does not exceed an
accorded amount of USD, the arbitration must be in accordance with the Shortened
Arbitration Procedure of the Society of Maritime Arbitrators Inc.
Summarizing, only some clues and small punctualities are made until this stage of this
Clause, easing its treatment.
b) LONDON: this is the most surprisingly part of this Clause: for the first time ever, the
possibility of the arbitration of any dispute of this contract can be done in London. The
arbitration process is quite similar as if done in New York, adapting its particularities as
the arbitrators must “carry on business in London and who shall be members of the Baltic
Mercantile & Shipping Exchange and engaged in Shipping” whose decisions must be
governed by the English Law.
As in the previous sub-clause, if the quantity claimed does not exceed a fixed amount, in
this case “the arbitration shall be conducted in accordance with the Small Claims
Procedure of the London Maritime Arbitrators Association”.
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It is easy to notice the important paper of the BIMCO in this Clause, which deeply insisted to
include the possibility to carry out any Arbitration in Europe – then London, of course – to balance
strengths between the parties and to achieve the level of internationalization that this contract
was intended to have.
Regarding the Clauses that included changes in this comparison between the NYPE 93 and the
ASBATIME, and even though practically all the clauses had alterations, a total of ten contained
changes worth to be explained due to their importance and another four were almost a hundred
per cent changes, meaning a total of fourteen clauses widely altered – almost a fifty per cent of
the total of the clauses contained in the ASBATIME form.
Furthermore, not all clauses were equally changed, since although some of them needed to be
widened and more explained, others needed to be shortened and specified – BIMCO, as per their
experience in the charter parties field, contributed to perform this task valuably.
3.4.4 Conclusions
The NYPE 93 was the result of the first collaboration of the three most important shipping entities
of the world at that time: the ASBA, the BIMCO and the FONASBA. The result was a far complete
and competitive form of time charter party, well-balanced between the parties – mainly due to
the nature of these different entities and their shipping philosophy, which endowed this contract
of a worldwide acceptance and internationalization.
In the NYPE 93, as recently mentioned, was the first NYPE form to offer a fair contract between
the Owners – represented by the BIMCO, and the Charterers – represented by the ASBA and the
FONASBA. With the modelling of some clauses as the Clause 45 – “Arbitration” and the Clause 19
– “Drydocking”, the pro-Charterer historic aspect of the NYPE charter party was lowered, bringing
the contract into a more compensated level between the parties.
Focusing into the content of the form, a deep reorganization can be easily noticed from the first
moment on compared to the ASBATIME. Firstly, the Rider Appendix was removed, and its most
used clauses were directly included as general clauses in the main terms. However, a couple of
lines are left at the end of the contract in case the parties wish to add any other non-prevised
clause. This fact provides and incredibly concise and certain aspect of the aim of the form to the
parties, with only a few and necessary gaps to be filled.
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Secondly, it is important to also mention the changes done in the content of the clauses itself.
Although some of these changes are seen in the contract as a wider explanation of some clauses
or by simply detailing shipping updates done from the ASBATIME’s date of issue, the most
important changes to highlight are those made to simplify some of the clauses, providing a better
understanding of them and avoiding possible disputes.
Thirdly, an Appendix A is included at the end of the form where a more complete description of
the vessel can be done – shortening the preamble and allowing the parties to perform a deeper
exposition of the vessel’s characteristics without deforming the other sections of the contract.
To conclude with this analysis of the NYPE 93 charter party, it is feasible to agree that it became
widely accepted by its time of issue, and even though the BALTIME form – issued by BIMCO in
1939 - was still the most commonly time charter party used in Europe, the NYPE 93 started to be
perceived as a quite complete effective form to be considered.
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Chapter 4. The NYPE 2015
101
Chapter 4. The NYPE 2015
As previously explained in the Introduction, a deep analysis of the New York Produce Exchange
charter party has been done during all this paper. Starting with the NYPE 46 version – which is
still the most used in the chartering business – all its changes and updates have been explained
all along its revisions, the NYPE 81 and the 93 versions.
Thanks to this NYPE timeline, it has been possible to reach a deep understanding of the
philosophy of this kind of contract, in which context took place its born, its strengths and
debilities, its development during the years - influenced by other organizations that took part in
its revision, and its acceptation in the maritime industry. All this process led to the fourth and
main chapter of this FDP: the explanation and analysis of the NYPE 2015. 32
It is well known by the entire shipping industry that the New York Produce Exchange charter party
is the most used time charter form in the dry cargo sector – even more than the well-known
BIMCO’s GENTIME. However, something strange happened until the publication of the NYPE
2015: even though the NYPE 93 version was available, there was a clear market tendency to keep
employing the NYPE 46 – although many of its twenty-eight clauses were altered or simply
substituted by rider clauses - in the chartering process, providing an idea of the conservative
mentality of the maritime sector.
Nevertheless, a decision to perform a general revision of the NYPE 93 version was taken by the
three most important shipping organizations of our times: the BIMCO, the ASBA and the SMF –
it is easily noticeable that they represent the three most important continents of the world in
pure shipping trade terms: Europe, America and Asia respectively. After twenty years of the issue
of the last NYPE edition, a feeling of an improving possibility led these three organizations to
carry out the major revision never done before of this charter party, involving directly both
Owners and Charterers to attain the best-balanced possible level of their respective interests.
32 The Association of Ship Brokers & Agents (U.S.A.); The Baltic and International Maritime Council; The Singapore Maritime Foundation. The NYPE 2015 Time Charter party. New York: June 3rd, 2015. Form available at: https://www.bimco.org/-/media/BIMCO/Contracts-and-Clauses/Contracts/Sample-copies/Sample-copy-NYPE-2015.ashx
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The committees of these three organizations to perform this revision was formed by the
following personnel:
BIMCO Sub-committee
Chaired by Mrs Inga Froysa (Torvald Klaveness), with John Freydag (Schulte); Jonathan Young
(Cargill); Lasse Brautaset (Nordisk); Paul Kaye (West of England P&I Club); Sun Jia Di (COSCO) and
Harry Fafalios (Greek Shipping Co-operation Committee).
ASBA Committee
Chaired by Nigel Hawkins (NW Johnsen & Co, Inc), with Soren Wolmer (Quincannon Associates);
Paul Hirtle (LB Chartering LLC); Gerry Desmond (Salient (Americas) Inc.); and Robert J Dillon
(John F. Dillon & Co., LLC).
SMF Committee
Chaired by David Chin (Chief Executive SMF), with Henry Mytton-Mills (Aries Shipbrokers); and
Gina Lee-Wan (Allen & Gledhill LLP).
The aim of this major revision was no other than providing the shipping industry of an updated
and modern form of the most used time charter party, which included the legal developments
and stepped into the contemporary commercial practices, having a worldwide reach and applied
the most common amendments done in its previous versions.
These three organizations also carried out, in their respective areas, a huge series of
consultations to the industry. By the formation of a drafting team, it was possible to present and
explain the main changes, characteristics and improvements of the NYPE 2015 form to the most
important companies and entities of the maritime industry, receiving their feedback.
Furthermore, a draft form after all these consultations was uploaded on the BIMCO’s website,
where all stakeholders and members could perform a review, providing their opinions and
suggestions. Consequently, the whole maritime industry saw itself involved in the update of the
New York Produce Exchange, creating a hand-to-hand work which shall benefit all parts.
Looking deeply into the content of the NYPE 2015, the first characteristic to be noticed is its
length: nothing less than 32 pages, being the first one for the preamble, the following twenty-
seven pages for the fifty-seven Clauses of the contract and the last four for the Appendix A.
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Once all this has been explained, we shall start with the analysis of the last and most important
form of this FDP.
4.1 The preamble
Being the NYPE 2015 the longest contract that will be analyzed in this paper, it is surprising to
find that its preamble is the shortest of them all, with only seventeen lines including the following
concepts:
- Lines 1-2: stablish the date of the charter party.
- Lines 3-6: used to identify the Owners. In this form, the parties shall also indicate if the Owners
are the “Registered Owners” of the ship, the “Disponent Owners” in case they are acting under
a bareboat charter or the “Time Chartered Owners” in case she is under another time charter. By
including these choices, it is clearly identified the real nature of the Owners, solving many legal
problems that may happen when vessels are sub-chartered under many contracts.
- Lines 7-12: some key information of the vessel is detailed within these lines such as her name,
her IMO number, her flag, her building year and deadweight – for more information, the parties
are redirected to the Appendix A of the contract, where a major description of the vessel is made.
- Lines 14-17: in these lines it is set a brief constitution of the terms and conditions of the contract.
It is interesting to highlight than, in case of any dispute, additional – or Rider – clauses may prevail
to any other clause of the main terms.
4.2 The main terms
The main terms of the NYPE 2015 form contain nothing else than fifty-seven clauses, with many
brand-new clauses and with an intended better organization among them.
- Clause 1 – Duration/Trip Description: this clause is divided into five different sub-clause:
a) It is indicated the duration of the contract, where a gap is left blank to be filled by the
total of time – being a time charter, or by a certain amount of voyages to be performed
– therefore forming a trip charter.
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b) Trading Limits: the parties shall here indicate the trading limits where the vessel is
allowed to operate between.
c) Berths: state that vessel’s load and discharge operations must always be performed “in
any safe anchorage (…) berth (…) or place (…), provided the Vessel can safely enter, lie
and depart always afloat”.
d) In this sub-clause are indicated the areas and ports were the vessel can safely lie aground
to carry out any cargo operations if requested by the Charterers. It is also stated that, in
case the vessel suffers any damage or loss “including any underwater inspection required
by class”, the Charterers are to indemnify the Owners.
The inclusion of this NAABSA provision is mainly made due to the grain trades, where it
is still common that vessel needs to be operated in these conditions. Nevertheless, this
must be carefully analyzed case-by-case since there would be many insurance and class
implications for the Owners in case they do agree.
However, this sub-clause is also omittable in case that not areas nor ports are defined,
being therefore understood that the vessel will not be claimed to operate lying aground.
e) Sublet: it is given the option to the Charterers to sublet the vessel to another party,
where they “remain responsible for the fulfillment of this Charter Party”. In cases this
ever happens, even though the Owners are not a party to the consequent sub-charter,
they still hold a contractual relation to the sub-Charterers due to the issuing of any bill
of lading.
- Clause 2 – Delivery: as the previous Clause, this one is also divided into five more sub-clauses:
a) It must be indicated where the Vessel must be delivered.
b) It is stated that, on her delivery, the Vessel must be “seaworthy and (…) fit to be
employed for the intended service”, with power enough “to operate all cargo handling
gear simultaneously” and full complement of crew complying with the STCW
requirements.
c) Regarding the holds state, they are required to be clean and ready to receive cargo in
one of the following places:
i. On delivery port
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ii. On the first loading port in case the place of delivery is not the first place where
she will receive cargo.
d) Regarding the exact date of delivery, the sub-clause 2(d) states that the Owners must
keep the Charterers informed of the Vessel’s itinerary and continuous notices of her
delivery. Finally, once the vessel is ready to come on hire, Owners must emit the well-
known “Notice of Readiness”.
e) If the Charterers refuse the acceptance of the delivery of the vessel in cases when she
is for example arriving after the cancellation date or the Charterers simply decide to
exercise their right to cancel the charter party, it “shall not prejudice their rights
against the Owners under this Charter Party”.
- Clause 3 – Laydays/Cancelling: this Clause defines the date the vessel is set on hire, and in case
she is not in the place of delivery in a stated date, Charterers “shall have the option of cancelling
this Charter Party”. However, if the aforementioned situation occurs, this cancelling option of
the Charterers is withdrawn if the vessel has already issued her notice of readiness.
- Clause 4 – Redelivery: this Clause is divided into three sub-clauses:
a) It must be detailed the place or redelivery “in like good order and condition ordinary
wear and tear excepted”.
b) Similarly to the sub-clause 2(d), in this sub-clause it is indicated that the Charterers
must inform the Owners about the Vessel’s itinerary so that they can secure the next
employment of the ship once this charter comes to its end, fixing a number of
approximate and definite days’ notices.
c) As in the sub-clause 2(e), the Owners’ acceptance of the redelivery does not mean
any loss of their rights to perform any claim against the Charterers.
- Clause 5 – On/Off-Hire Survey: maintained practically equal than in the NYPE 93 form, this clause
states that “the parties shall (…) each appoint surveyors” at the delivery and redelivery times,
whose mission is to perform a joint survey of the vessel to ascertain her general condition and
the quantity of bunkers remaining on board. Once the survey is concluded, “a single report shall
be prepared on each occasion and signed by each surveyor”, writing separated reports in case of
any disagreement. It is also explained that failing to the attention of the survey or the report’s
signature by any of the parties “such party shall nevertheless be bound for all purposes by the
findings in any report prepared by the other party”.
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At the end of the Clause, it is indicated that any loss of time at the on-hire survey “shall be for
the Owners’ account” but, in case of happening at the off-hire survey, that “shall be for the
Charterers’ account”.
- Clause 6 – Owners to Provide: this Clause is again divided into three sub-sections:
a) Following the duties of the nautical management of the Vessel, which are responsibility
of the Owners in this kind of contracts, this sub-clause stablishes everything the Owners
must take care of such as “the insurances of the Vessel, (…), all provisions, cabin, deck,
engine-room, (…), stores, boiler water and lubricating oil”, etc.
As in the previous forms, any expenses pertaining to the crew as well as the crew itself
are also under Owners responsibilities. In addition, the Vessel’s class and hull, machinery
and equipment’s state must also be kept efficiently.
b) This second sub-clause deals with the necessary documentation the vessel must have in
line “to trade within the agreed limits”. Some documents are specially mentioned, as the
ITC, the Suez and Panama tonnage certificates, the Certificate of Registry, etc. However,
it is pointed out that these documents are included “but not limited”, therefore more
certificates can be demanded to the vessel in case they are found necessary for the
trading.
The second paragraph of this Clause deals entire and uniquely with the Certificates of
Financial Responsibility (COFR) for oil pollution with allow the ship “to trade withing the
agreed limits as may be required at the commencement of the Charter Party”. However,
in case these certificates need to be renewed but its value has increased considerably or
it is simply not available in the market, both parties are to reach a solution otherwise “the
port(s) (…) are to be considered as added to the Vessel’s trading exclusions”.
c) This final sub-clause deals with a topic that had never been included in any previous NYPE
form which is the crew’s assistance in the opening and closing of the hatches. If this task
is ever not permitted “by shore labor regulations”, it would run on Charterers’ account.
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- Clause 7 – Charterers to Provide: as the previous Clause, this one is also divided into three sub-
clauses:
a) Contrary to the sub-clause 6(b), in this case the Charterers are responsible for all expenses
related to the cargo and everything necessary to trade it such as the bunkers, the port
charges, watchmen, pilotages, etc “and all other usual expenses except those stated in
Clause 6”. Nevertheless, if the Vessel goes into a port “for causes for which the Vessel is
responsible”, expenses shall be paid by the Owners.
b) This sub-clause deals with the fumigations’ responsibilities in a very balanced manner: in
case they are ordered due to any crewmember’s illness or “for infestations prior to
delivery under this Charter Party” they must be on Owners’ account; however, if they are
ordered “because of cargoes carried or ports visited” while being on hire, they shall be
under Charterers’ account.
c) To conclude with this Clause, it is mentioned that all “necessary dunnage, lashing
materials and also any extra fittings” shall be provided and paid by the Charterers, who
will be also allowed to use “any dunnage already aboard the Vessel”. Nonetheless, all this
lashing material and dunnage shall be removed by the Charterers prior to redelivery.
- Clause 8 – Performance of voyages: this Clause is divided into two sub-clauses:
a) It is indicated that the Master must perform the voyages “with due despatch” rendering
assistance with the crew except in those provision of the Clause 38 “Slow Steaming” –
which will be soon explained in this paper. It is also pointed out that he or she must be
“conversant with the English language and (…) be under the orders and directions of the
Charterers”. Furthermore, it is also a Master duty to supervise all cargo handling
operations, which are performed by the Charterers.
b) In this sub-clause it is given the possibility to the Charterers to complain to the Owners in
case they “shall have reasonable cause to be dissatisfied”, being the Owners obliged to
investigate this issue.
- Clause 9 – Bunkers: this is one of the most re-written clauses of the NYPE 2015. By this huge
update, dealt into seven separate provisions, this Clause tries to cover some matters absent in
many other standard time charter forms that will be explained below:
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a) Bunker quantities and prices: again, divided into three different alternatives:
i. Similarly to the NYPE 93 form, Charterers are to pay for bunker on board at
delivery and Owners at redelivery – meaning a change of property of the product,
fixing its price. It is worth to point out the words “or any other termination”, since
this change of bunker’s property can be also done when the charter party comes
to an end due to any other different reason than the redelivery time – as, for
example, due to a non-payment of hire.
ii. This sub-clause shall be applied in case of a trip charter, where the Owners are
required to “provide sufficient bunkers onboard to perform the entire time charter
trip”. In this case, Charterers are to pay “for the mutually agreed estimated bunker
consumption for the trip”, fixing how many metric tons and at which price.
Once the voyage is over, any difference of this bunker consumption must be
refunded by the party as the case may be.
iii. In this third alternative, no bunkers shall be paid by the Owners to the Charterers
at delivery, but the vessel must have “the same quantities and grades of bunkers
as on delivery”. This case provides an alternative to the risk of market’s price
fluctuations of these products, the Charterers’ paying only for the bunker so far
consumed and where any difference of quantity is determined by the price paid –
supported by a commercial invoice of the suppliers.
Finally, it is also important to remark that in case of no choosing any of the alternatives,
then the first one “i” shall apply.
b) Bunker Prior to Delivery/Redelivery: this sub-clause provides a reciprocal arrangement
for the Charterers to bunker the ship before delivery and for the Owners to bunker prior
to redelivery. This provision covers a common practice in the industry which consist in
allowing to bunker the vessels before their delivery since it may probably be not available
or its price can be much higher at that delivery place.
However, any losses or delays must be indemnified by the party that may be in case it
happens.
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c) Bunkering Operations and Sampling: another sub-clause divided into four different
points:
i. This first point claims the cooperation of the Chief Engineer during the bunkering
operations, including a series of technical actions to be carried out.
ii. Regarding the samples, it is stated that “a primary sample of each grade of fuels
shall be drawn” according to the IMO Resolution MEPC 182(59) “Guidelines for the
Sampling of Fuel Oil for Determination of Compliance with the MARPOL 73/78
Annex VI”. This primary sample must then be divided into five smaller samples:
one to be kept on board and the rest to be distributed to the Owners, the
Charterers and the bunker suppliers.
iii. This point expresses the Charterers warranty to accomplish the sub-clause (c)(ii)
above mentioned.
iv. It covers the possibility that different bunker grades need to be supplied and
segregated on board, exempting the Owners of any capacity restriction due to this
segregation.
d) Bunker Quality and Liability: divided into two sub-sections:
i. It must be detailed the bunkers’ specifications and grades that the Charterers
must supply, which must be in compliance with the latest ISO 8217 and “shall be
of a stable and homogeneous nature and suitable for burning in the Vessel’s
engines”.
ii. In case the vessel suffers any damage due to the bunkering of an unsuitable fuel,
Charterers are to be responsible of all losses and expenses to correct this failure,
keeping the Owners exempt at all time.
e) Fuel Testing Program: it is stated that if the Owners must assume the cost to send one of
the samples above mentioned for testing and, in case of failing to its compliance with the
latest ISO 8217, notify the Charterers and “provide a copy of the report”.
If the Charterers, once received this report questions its results, their sample “shall be
sent to a mutually agreed, qualified and independent laboratory”.
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f) Bunkers Fuel Sulphur Content: in order to meet with the Sulphur fuels in specific areas,
this sub-clause is introduced with two different sub-sections:
I. It is indicated that any fuels supplied by the Charterers must allow the vessel “to
comply with the maximum Sulphur content requirements of any ECA when the
Vessel is ordered to trade within that area”. It is also stated that any entity
involved in the bunkering operations in which the Charterers are responsible
“shall comply with Regulations 14 and 18 of MARPOL Annex VI”.
Finally, in case Charterers do not comply with any of the above statements, they
must indemnify the Owners and keep them harmless of legal claim that can arise.
II. When Charterers comply with the sub-section (f)(i), the vessel shall then comply
with the Regulations 14 and 18 of MARPOL Annex VI as well as “be able to
consume fuels of the required Sulphur content”, keeping the Charterers exempt of
any failure of the vessel in this respect
III. To conclude, a brief description of the term “ECA” is provided together with its
legal references.
g) Grades and Quantities of Bunkers on Redelivery: this last provision addresses the quantity
of bunker the vessel must have at redelivery, which “shall always be appropriate and
sufficient to allow the Vessel to reach safely the nearest port at which fuels of the required
types are available”.
- Clause 10 – Rate of Hire; Hold Cleaning; Communications; Victualing and Expenses: a deep
reorganization of this Clause has been made as it can be appreciable on its title, being divided
into two sub-clauses:
a) In this first sub-clause, the parties must specify the daily rate of the hire as well as its
currency – not USD by default., and, if agreed between them, the redelivery can be made
with “unclean/unswept holds” by fixing a lumpsum payment by the Charterers.
In addition, and only if authorized by the Charterers, “the Owners shall victual pilots and
such other persons”, paying also an agreed lumpsum payment for the CVE obligations.
To conclude this first sub-clause, it is pointed out that delivery, redelivery or termination
of this contact “shall be adjusted to UTC”.
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b) Hold Cleaning/Residue Disposal: divided into three sub-sections:
I. The parties agree a fixed rate per hold in case the Charterers request the Owners
“to sweep and/or wash and/or clean the holds between voyages and/or between
cargoes”. However, any time taken for cleaning “shall be for the Charterers’
account”, being the Owners exempted if, once cleaning operations have been
carried out, “holds are not accepted or passed”.
II. Any cleaning agent or additives used for the holds’ cleaning “shall be supplied and
paid for by the Charterers” and shall be “in accordance with IMO Resolution
219(63) Guidelines for the Implementation of MARPOL Annex V”.
III. In case of being necessary any removal of cargo related residues or cleaning
agents or waste, “the Charterers shall remain responsible for all costs and time”
and, as in the previous sub-section, “shall always be in accordance with (…)
MARPOL Annex V”.
- Clause 11 – Hire Payment: Another clause divided into six sub-clauses:
a) Payment: it is explained how the hire must be paid by the Charterers to the Owners
designated bank and “in the currency stated in Clause 10”. This hire must be free of bank
charges and “fifteen days in advance and for the last fifteen days or part of same the
approximate amount of hire”, being the first payment on delivery.
b) Grace Period: in case of any failure of the payment of the hire by the Charterers, Owners
shall give “three Banking Days written notice to rectify the failure”. Once it is rectified by
the Charterers, “the payment shall stand as punctual”.
c) Withdrawal: following the previous sub-clause, if the Charterers do not rectify the
payment during the three Banking Days aforementioned, the Owners shall have liberty to
withdraw the vessel and claim for any loss due to the earlier termination of the charter –
preventing them of any lower market rate than the charter Hire rate.
Nevertheless, the process of withdrawing a vessel before the redelivery date for a non-
payment of the Hire involves complicated commercial and contractual procedures, which
are always recommended to be consulted with the vessel’s P&I Club.
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d) Suspension: this sub-clause provides an alternative to the previous sub-clause in cases
where a withdrawal may not be commercially interesting for the Owners. With this
option, all Owners responsibilities are suspended until the hire is duly paid, with any extra
expenses for the Charterers’ account.
e) Last Hire Payment: the last payment of the hire shall be made “for such length of time as
the estimated time necessary to complete the voyage”, deducting estimated Owners’
expenses prior redelivery. Any difference in bunker shall be refunded by the
correspondent party.
This sub-clause includes a paragraph making reference to the Clauses 9 (a)(ii) and (iii),
since if the parties have agreed any of them “the Charterers shall have the right to deduct
the value of bunker on redelivery”.
f) Cash advances: any “cash for the Vessel’s ordinary disbursement at any port” can be
advanced by the Charterers with a 2.5% commission, being them “in no way responsible”
for what these advances are applied and which will be afterwards deducted from the hire.
- Clause 12 – Speed and Consumption: this Clause, newly included in this form, deals with the
speed and consumption obligations into five different sections:
a) This first section explains that “the Vessel shall be capable of speed and daily consumption
rates as stated in Appendix A”, always in good weather and with a wind up to Force four
of Beaufort Scale and Sea State three of Douglas Scale. However, any variation of this
speed “to comply with the Charterers’ orders (…) or for reasons of safety…” among other
exceptional cases “shall be excluded from performance calculations”.
b) The section “b)” of this Clause provides the option to the Charterers to use “their
preferred weather routing service”, which the Master will have the obligation to follow
except those cases where “the safety of the Vessel and/or cargo” is compromised.
c) This third section specifies that the route that the Vessel will finally follow “shall be used
as the basis of any calculation” of her performance.
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d) In case of any reduction of the speed or increasing of the consumption, the Charterers
are given the possibility to extent a claim “limited to the estimated time lost and/or the
addition fuel consumed”. However, any time lost shall compensate the value of the saved
fuel or vice versa.
e) The last section of this Clause explains that, in case of any dispute arises regarding the
performance of the voyages, “an independent expert or alternative weather service
selected by mutual agreement” shall study the case with all the tools provided by the
Owners, as the Vessel’s deck logs, “whose determination shall be final” and whose cost
shall be paid by both parts equally.
- Clause 13 – Spaces Available: remarkably similar as in the NYPE 93, this Clause is also divided
into two sub-clauses:
a) This first sub-clause explains that all usual places of loading, “as much as she can
reasonably and safely stow and carry” and also accommodations for supercargo, if
carried, must be at the Charterers’ disposal. On the other side, “sufficient space for ship’s
officers, crew, tackle, apparel, furniture, stores and bunkers” shall be reserved.
b) The second sub-clause acts in a protective manner for the Owners “in the event of deck
cargo being carried”. In case of “any loss and/or damage and/or liability of whatsoever
nature howsoever caused to the deck cargo” then “Owners are to be and are hereby
indemnified by the Charterers”.
- Clause 14 – Supercargo: this Clause gives provides the Charterers to appoint a supercargo “who
shall accompany the Vessel at the Charterers’ risk and see that voyages are performed with due
despatch”.
Even though the Vessel must provide the supercargo with all commodities while on board, both
the Charterers and the appointed supercargo “are required to sign the standard letter of waiver
and indemnity (…) before the supercargo comes on board the Vessel”.
- Clause 15 – Sailing Orders and Logs: unchanged from the NYPE 93 form, this clause explains that
the Charterer “shall furnish the Captain (…) all requisite instructions and sailing directions in
writing” and provide “the Charterers, their Agents or Supercargo (…) with a true copy of daily
Logs”.
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These logs must detail all data concerning “the course of the vessel, the distance ran and the
consumption of bunkers.” and must be written in English, as well as all instructions and sailing
directions given by the Charterers.
- Clause 16 – Cargo Exclusions: this new Clause, whose content is extracted from the sub-clause
4(a) of the NYPE 93, entitled “Dangerous Cargo/Cargo Exclusions”, states that the vessel shall be
employed to carry only lawful cargo, excluding any dangerous or similar cargo “unless carried in
accordance with the requirements (…) of the competent authorities of the country of the vessel’s
registry and of ports of shipment and discharge and of any intermediate countries or ports
through whose waters the vessel must pass”.
Furthermore, the following cargo is excluded to be carried during the charter: livestock, arms,
ammunition, explosives, nuclear and radioactive materials, also leaving some lines to fill with
more banned cargo in this contract.
- Clause 17 – Off-Hire: very similarly as in the NYPE 93, this clause the events that can set the
Vessel off-hire during the charter. In it, it is stated that any loss of time due to any damage or
deficiency of the ship “unless (…) is caused by events for which the Charterers, their sub-
Charterers, servants, agents or subcontractors are responsible (…) or by average accidents to the
vessel or cargo unless resulting from inherent vice, quality or defect of the cargo, (…), the payment
of the hire and overtime (…) shall cease for the time thereby lost”.
In the above events’ list of this Clause of this 2015 NYPE version, it is also added the “detention
by Port State control or other competent authority for Vessel deficiencies” and the drydocking for
anything related to “underwater parts”.
It is also included that “should the vessel deviate during a voyage, contrary to the orders of the
Charterers, for any reason other than accident to the cargo (…) the hire is to be suspended (…)
until she is again in the same or equidistant position (…) and the voyage resumed”.
Finally, it is also stated that, in order to clarify the Owners’ liability for fuel consumed during
these periods, all bunkers used during this period “shall be for the Owners’ account”, where they
can be deducted from the hire or simply taken into account at the final calculation of fuel used
depending on the agreement between the parties in the Clause 9 “Bunkers”.
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- Clause 18 – Pollution: this Clause, which is self-explanatory, deals with the coverage for oil
pollution the Owners must provide, which shall be “equal to the level customarily offered by the
International Group of P&I Clubs”.
- Clause 19 – Drydocking: it is clearly explained that “no drydocking shall take place during the
currency of this Charter Party”, detailing the last drydocking date. However, two exceptional
cases are mentioned which would allow to perform this action: in case of emergency or in the
case under the Clause 52 (b) - “Period Applicable Clauses”.
- Clause 20 – Total Loss: unchanged from the previous NYPE version, this Clause prevents the
refund of the money paid by the Charterers and not earned due to the total loss of the Vessel
employed.
- Clause 21 – Exceptions: same as in the previous Clause, no changes from the NYPE 93 have been
done in this Clause, maintaining the same list of events “always mutually excepted”.
- Clause 22 – Liberties: another Clause unchanged from the previous NYPE version – in this case,
unaltered even from the NYPE 46. Concretely, this Clause provides the vessel the “liberty to sail
with or without pilots, to tow and to be towed, to assist vessels in distress, and to deviate for the
purpose of saving life and property”, topics that are basically with the line of the Master’s
obligation to proceed with due despatch.
- Clause 23 – Liens: this Clause details that the Owners “shall have a lien upon all cargoes, sub-
hires and sub-freights (…) belonging or due to the Charterers or any sub-Charterers” and the
Charterers “shall have a lien on the Vessel for all moneys paid in advance and not earned”.
However, in the second paragraph, it is indicated that “The Charterers will not directly or
indirectly suffer (…) any lien or encumbrance, which might have priority over the title and interest
of the Owners in the Vessel.”.
Nevertheless, the same protective measure for the Owners is found, as in the previous NYPE
form, at the end of this clause by declaring that “The Charterers will not procure any supplies or
necessaries or services (…) on the credit of the Owners or in the Owners’ time”.
- Clause 24 – Salvage: in case of performing any salvage operation, this Clause states that all
benefits shall 4be distributed in the same proportion, taking into account “crew’s proportion”.
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- Clause 25 – General Average: even though the general concept of this Clause remains is kept in
the same line as in the NYPE 93, some details have been modified to duly update it to the present
times.
In this case, it is clearly mentioned that “General Average shall be adjusted according to York-
Antwerp Rules 1994 and settled in US dollars in the same place as stipulated in Clause 54 (Law
and Arbitration)”. Furthermore, it is indicated that all bills of lading issued under this charter
party must contain a provision mentioning the use of the York-Antwerp Rules 1994 to adjust any
General Average as well as the New Jason Clause
Finally, it is pointed out that “Time charter hire will not contribute to general average”.
- Clause 26 – Navigation: this clause insists on the fact that “the Owners shall remain responsible”
of everything related to the nautical management, something quite reasonable due to the nature
of the same charter party.
- Clause 27 – Cargo Claims: in case of any related to the cargo “shall be settled in accordance with
the Inter-Club NYPE Agreement 1996 (as amended 1 September 2011), or any subsequent
modification…”.
- Clause 28 – Cargo Handling Gear and Lights: this Clause states that the Owners shall keep the
cargo handling gear “as described in Appendix A (Vessel Description)”. It is also told that Owners
must provide all lights on board for night work, but “additional lights (…) shall be at Charterers’
expense”.
Additionally, it is also allowed to the Charterers to make the Vessel work “night and day and all
cargo handling gear shall be at the Charterers’ disposal”, being important to highlight that if there
is any cargo handling gear inoperative, “the vessel is to be considered to be off hire to the extent
that time is actually lost”, being the Owners responsible of any extra expenses that could arise
from it. However, this would not apply in case that “such disablement or insufficiency of power is
caused by the Charterers’ stevedores”.
To conclude, it is indicated that in case the Charterers required the Owners to “bear the cost of
hiring shore gear in lieu”, the Vessel must be set off-hire for the time lost.
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- Clause 29 – Solid Bulk Cargoes/Dangerous Goods: this Clause – as its own title clearly reveals –
deals with the requirements to the Charterers in case of carrying any of these goods. To explain
these special requirements, this Clause is divided into three sub-clauses:
a) Solid Bulk Cargoes: this first sub-clause indicates that the Charterers need to provide all
information, prior loading, of any solid cargo in bulk “in accordance with the requirements
of the IMO International Maritime Solid Bulk Cargoes (IMSBC) Code” in order to allow the
crew to prepare the Vessel’s holds and cargo spaces for the carriage and take any specific
required measure.
b) Dangerous Goods: in case any dangerous cargo is agreed to be carried, “the Charterers shall
provide a dangerous goods transport document” which must include a complete
description of the nature of the cargo, its packing, its labelling and many other
characteristics that certificate its “proper condition for transport according to (…)
regulations”.
c) This final sub-clause empowers the Master not only to refuse or discharge any of the above-
mentioned cargoes of sub-sections “a)” and “b)” in case of any failure to fulfil the required
documents on behalf of the Charterers, but to perform it in their own “risk and expense”.
- Clause 30 – BIMCO Hull Fouling Clause for Time Charter Parties: this Clause, which is sub-divided
into five different sub-clauses, explains the obligation of the Owners to maintain a “thoroughly
efficient state” of the ship’s hull and the cases in which this state can be affected by certain orders
of the Charterers as follows:
a) This first sub-clause deals with the limit of time the Vessel can be totally stopped, both
under operations or simply at anchorage, to not suffer any affectation to the hull’s state.
In case this limit is exceeded, it is stated that “any warranties concerning speed and
consumption shall be suspended pending inspection of the Vessel’s underwater parts”.
b) In case the above-mentioned limit is exceeded, any party may have the right to perform
an underwater inspection “at the Charterers’ risk, cost, expense and time”.
c) If a cleaning of the underwater parts needs to be done “as a result of the inspection” and
again “at Charterers risk, cost, expense and time”. This sub-clause is also divided into three
different points as follows:
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i. All cleaning must be “under the supervision of the Master” and “in accordance
with he paint manufacturers’ (…) guidelines”, without damaging any Vessel’s
underwater part.
ii. If such cleaning is not possible at the place of inspection or Charterers postpone
it, then “speed and consumption warranties shall be suspended” until it is
performed.
iii. Contrary to the previous point, if the Owners refuse to allow the cleaning, then
“speed and consumption warranties shall be reinstated”.
d) The fourth sub-clause states that the “cleaning (…) shall always be carried out prior the
redelivery”. However, both parties can agree a lump sum payment to be received by the
Owners so that they can perform the cleaning by their side once the vessel is redelivered.
e) This final sub-clause permits the Charterers to “demonstrate that the Vessel’s
performance remains within the limits of this Charter Party” even exceeded the time limit
of sub-clause (a), being therefore “Charterers’ obligations (…) of inspection and/or
cleaning” no longer applicable.
- Clause 31 – Bills of Lading: this clause is divided into three sub-clauses as follows:
a) It is explained that the Master is in charge of signing the bills of lading or waybills. However,
“with the Owners’/Master’s prior written authority”, the Charterers are also entitled to sign
them.
b) Following the line of the previous sub-clause, in case of “any inconsistency between this
Charter Party and any bills of lading or waybills signed by the Charterers or their Agents or
by the Master at their request”, the Charterers shall indemnify the Owners “against all
consequences or liabilities”.
c) Provides a specific wording that all bills of lading which cover cargo shipped on deck must
include, which basically exempts the Owners of any responsibility of that cargo carried on
deck.
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- Clause 32 – BIMCO Electronic Bills of Lading Clause: as the previous Clause, this one is also
divided into three sub-clauses:
a) Being self-explaining, this first sub-clause enables the Charterers to decide if the bills of
lading and other cargo related documents in this charter party are to be issued
electronically – in terms of paperless.
b) In case the Charterers take this decision, the Owners “shall subscribe to and use Electronic
(Paperless) Trading Systems (…) provided such systems are approved by the International
Group of P&I Clubs”. However, all expenses occurred due to this subscription must be on
Charterers’ account.
c) Nevertheless, the Owners are to be kept harmless of any problems “arising from the use
of the systems referred to in Sub-clause (b)”, in exception that these problems come from
their own negligence.
- Clause 33 – Protective Clauses: this Clause provides three clauses of which the charter party is
subject to and which must be included in all bills of lading and waybills issued as follows:
a) Clause Paramount: it is explained that all bills of lading must include a clause which
bounds them to “the Carriage of Goods by Sea Act of the United States, the Hague Rules,
the Hague-Visby Rules, (…) or such other similar national legislation” depending of the
origin or destination of the bills of lading. In this case, the wording “or if no such
enactments are mandatorily applicable, the terms of the Hague Rules shall apply” are
added to make sure that, in the absence of applicable rules in a particular trade, no doubts
about the applicable liability regime arise due to any uncertainty.
b) New Both-to-Blame Collision Clause: this clause distributes liabilities for a collision
between two vessels where both have acted negligently. This clause is very important to
consider when the law of the United States may apply and exempts the Owners from any
liability to the cargo for its loss or damage resulting from any “act, neglect or default”
during the sea trip.
c) New Jason Clause: states any other part involved in the charter will contribute to general
average expenses even though the Owners have failed to exercise due diligence to make
the ship seaworthy. Since P&I Clubs commonly request to have this clause within all bills
of lading it is recommended not to change its wording.
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- Clause 34 – War Risks: this Clause represent the latest edition of BIMCO’s standard War Risks
Clause, known as CONWARTIME, and deals with the risks of attack by pirates while the Vessel
under the charter party sails certain dangerous areas. It is divided into ten sub-clauses as follows:
a) This first sub-clause provides definitions for the words “Owners” and “War Risks” to avoid
any misinterpretation of the whole Clause. It is important to mention that the definition
of Piracy has been aligned with the provision in the Piracy Clause – which differs of its
definition under international law but adjusts it to insurance purposes.
b) This sub-clause provides the Master and the Owners to “reasonably judge” whether any
of these events may be dangerous for the Vessel, allowing the Vessel not to enter any of
these dangerous Areas or providing the possibility to abandon it.
c) In line with the previous sub-clause, it is here stated that “The Vessel shall not be required
to load contraband cargo” as well as to navigate in any dangerous Area.
d) In case the Vessel “proceeds to or through an Area exposed to War Risks”, any additional
insurances required by the Owners’ insurers must be sustained by the Charterers.
e) Following the previous sub-clause, it is stated that those payments “shall be settled within
fifteen days of receipt (…) or on redelivery, whichever occurs first”.
f) Similarly as the sub-clauses “d” and “e”, if the crew is to perceive “any bonus or additional
wages” for sailing these Areas, Charterers are to reimburse to the Owners “at the same
time as the next payment of hire is due, or upon redelivery, whichever occurs first”.
g) This sub-clause, which is widely divided into five different sections, provides the Vessel
liberty to comply with any order or recommendation given by any international body such
as the government of the flag the Vessel is sailing under, the Security Council of the United
Nations or even included their insurance’s requirements – even though they have no
authority to give any orders or instructions to the Vessel.
Furthermore, in the last two sections of this sub-clause, the Vessel is also allowed to
discharge at any port cargo “which may expose the Vessel to being held liable as a
contraband carrier” as well as “to change the crew (…) or other persons on board who
might “be subject to internment, imprisonment, detention or similar measures”.
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h) It is stated that in case of refusal by the Owners to load or discharge cargo at any port,
“they shall immediately inform the Charterers”. Once informed, Charterers are to have
forty-eight hours to nominate an alternative port to proceed, but their failure to this
nomination provides liberty to the Vessel to discharge the cargo “at any safe port of their
own choice”. However, “all costs, risk and expenses” for these facts “shall be for the
Charterers’ account”.
i) Any claims arising while the Vessel is subject to the previous sub-clauses of this Clause
must be indemnified to the Owners by the Charterers.
j) To end this Clause, this last sub-clause indicates that when any actions are taken following
this War Risks Clause they “shall be considered as due fulfilment of this Charter Party”,
which protects the rights of the Owners to act as per this Clause if needed.
- Clause 35 – Ice: this Clause explains that the vessel “shall not be obliged to force ice” but if the
Owners approve, the vessel can follow ice-breakers if required. However, she “shall not be
required to enter in any icebound port or area (…) where there is risk (…) the vessel will not be
able on account of ice to safely enter or remain in the port or area or to get out”.
- Clause 36 – Requisition: this Clause has been maintained mostly unchanged from the NYPE 93
version. Even though the requisitioning of merchant ships is a very rare occurrence nowadays, it
states that if “the vessel be requisitioned by the government of the vessel’s flag or other
government to whose laws the Owners are subject during the period of this Charter”, the vessel
is to proceed off hire and, in case of being paid by the foresaid government, it shall be “retained
by the Owners”. However, the period of the Charter during the requisition will keep counting,
and if exceeds an amount of ninety days any of the parts can cancel the charter party with no
claims.
- Clause 37 – Stevedore Damage: very similarly as in the previous NYPE form, this Clause explains
that “the Charterers shall pay for any and all damage to the Vessel caused by stevedores”. For
that, the Master has twenty-four hours since it has been produced to notify the damage, in
writing, to the Charterers or their Agents, but “in case of hidden damage latest when the damage
could have been discovered by the exercise of due diligence”. The option of appointing a
surveyor to assess the extent the damages if necessary is provided to the parts.
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The clause is then divided into two sub-clauses:
a) This first subclause specifies that, in case these damages affect anything related to the
nautical management of the ship or her “trading capabilities”, they must be repaired
immediately by the Charterers at their own expense keeping the vessel on hire until
b) Contrary to the previous point, any damage not specified above “shall be repaired at the
Charterers’ option, before or after redelivery concurrently with the Owners’ work”. In this
case, only the time and the expenses for the repairs “for which the Charterers’ are
responsible” will exclusively paid to the Owners.
- Clause 38 – Slow Steaming: this Clause is one of the clues of the modernisation of this contract.
Although the Owners are under obligation to prosecute voyages with due despatch, this Clause
provides the Charterers the possibility to request the Vessel to adjust speed to arrive at any port
at a specific time, avoiding the risk that Owners can face claims from third parties. From its
beginning, this Clause is divided into six sub-clauses:
a) The first sub-clause sets the basis of the orders from the Charters to the Master to reduce
the speed in purpose to reach a specific destination at a specified time. Then, two
different options, where one must be deleted, are given:
i. *Slow Steaming: the speed is adjusted “provided that the engine(s) continue(s) to
operate above the cut-out point of the Vessel’s engine(s) auxiliary blower(s)”.
ii. *Ultra-Slow Steaming: in this case, the Master is required to adjust the speed
“regardless of whether this results in the engine(s) operating above or below the
cut-out point of the Vessel’s engine(s) auxiliary blower(s)”. If this option is chosen,
the Master is not obliged to comply with these orders in case the engines need
any additional spares or equipment.
b) It is stated that the Owners must ensure “that the Vessel is operated in a manner which
minimises fuel consumption” by taking into account several items which must be kept,
such as warranties of the speed and consumption, the safety of the Vessel, crew and
cargo, etc.
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c) In line with the previous sub-clause, it is indicated that “the Owners shall exercise due
diligence to minimise fuel consumption” when carrying out tasks as planning voyages,
making use of the Vessel’s navigation equipment and the report of any data to the
Charterers to “further improve the energy efficiency of the Vessel”.
d) To improve the Vessel’s energy efficiency, both parties must “share any findings and best
practices”.
e) In cases where sub-clause “a” has been applicated, the procedure with utmost or due
despatch on behalf of the Master will be understood to have been exercised by the
compliance of such instructions.
f) To conclude this Clause, it is stated that the Charterers are obliged to incorporate this
Clause in any bills of lading issued under the time charter. In case it is not, the Owners are
to be indemnified by the Charterers against any consequences and liabilities.
- Clause 39 – BIMCO Piracy Clause for Time Charter Parties 2013: this Clause’s wording has been
taken from the BIMCO Piracy Clause for Time Charter Parties, which was revised together with
the CONWARTIME in 2013 to update it to modern industry practices as well as legal
developments. It is divided into seven sub-section:
a) This first sub-clause states that the decision to proceed to an Area affected by Piracy
remains in the Owners/Master of the Vessel, having plenty of liberty not to enter or to
abandon any zone with this kind of situation.
b) It is explained that in case the Vessel acts as per sub-clause “a”, the Charterers must be
informed immediately in order to “issue alternative voyage orders and (…) indemnify the
Owners for any claims from holders of the Bill of Lading”. Furthermore, no off-hire will be
considered for the time lost “as a result of complying with such orders”.
c) Contrary to the previous sub-clause, if the Vessel agrees to proceed to an Area affected
by Piracy, this sub-clause, which is divided into four different sections, starts by allowing
her to take all necessary navigational and protection measures. In addition, the Vessel is
also given the liberty to comply with the “requirements under the terms of the Vessel’s
insurance(s)” as well as any direction “given by the Government of the Nation under
whose flag (…) sails” or any other Government the Vessel is bound to.
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To conclude, it is exposed that the Vessel has also the liberty “to comply with (…) any
resolution of the Security Council of the United Nations, the (…) orders of any
Supranational body (…) and with national laws (…) to which the Owners are subject”,
being also the Owners indemnified by the Charterers in case of claims of any third party.
d) Divided into three sections, this sub-clause basically explains that any additional cost of
the Vessel for sailing through these Areas will be on Charterers’ account, including
additional personnel, preventive measures, bonus wages to the crew or any additional
premium insurances.
e) In case of lost of time due to any pirates’ attack, it “shall be for the account of the
Charterers and the Vessel shall remain on hire”.
f) Being the Vessel seized by pirates, she “shall remain on hire (…) and the Charterers’
obligations shall remain unaffected”, ceasing the hire payments the ninety-first day of
seizure “until release”.
Once the Vessel is released, “Charterers shall pay hire (…) for any time lost in making good
any damage or deterioration resulting from the seizure”, although Charterers are not to
be liable for late redelivery due to this conditioning of the Vessel.
g) To end this Clause, this last sub-clause indicates that when any actions are taken following
this War Risks Clause they “shall be considered as due fulfilment of this Charter Party”,
which protects the rights of the Owners to act as per this Clause if needed.
- Clause 40 – Taxes: this clause obliges the Charterers to pay all taxes related to the vessel, the
cargo, the freights, the sub-freights and the hire during the duration of the contract as well as
after its currency. Nevertheless, “taxes levied by the country of the flag of the Vessel or the
Owners” are excluded to the Charterers.
However, in case of exemption of any of these taxes, “no charges (…) shall be assessed to the
Charterers”.
- Clause 41 – Industrial Action: shielding the Charterers interests, this Clause states that if the
Vessel is delayed or inoperative by any strikes or any other difficulties “arising from the Vessel’s
Ownership, crew or terms of employment of the crew of the chartered Vessel”, she is to be set
off-hire.
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Furthermore, Owners must guarantee that the “terms and conditions of employment of the crew
(…) are in accordance with the International Labour Organization Maritime Labour Convention
(MLC) 2006”.
- Clause 42 – Stowaways: this Clause’s wording was slightly changed from the previous NYPE
form, which deals with the responsibility and liability for any costs regarding the presence of
stowaways on board by dividing it into two sub-clauses:
a) If the stowaways have gained access to the vessel by means related to the cargo
operations – which are Charterers’ duties – then they are to be considered liable for any
consequences and “hold the Owners harmless and keep them indemnified against all
claim; costs (…); losses; and fines or penalties”, keeping the Vessel on hire.
b) In case that stowaways have gained access to the Vessel in any means different than those
detailed on the previous sub-clause, then the opposite is considered in this second sub-
clause, being the Owners liable of all above explained.
- Clause 43 – Smuggling: this Clause deals with another serious issue of the maritime industry in
a very similar manner as the previous Clause:
a) If the smuggling is carried out by any crewmember, then “Owners shall be liable (…) and
hold the Charterers harmless (…) and indemnified against all claims, costs, losses, and
fines and penalties”, being the Vessel off-hire.
b) On the other hand, of the illegal substances are found related to the cargo, then the
Charterers are responsible of all consequences above mentioned and the Vessel is
remained on-hire.
- Clause 44 – International Safety Management (ISM): it is stated that “the Owners shall procure
that the Vessel (…) shall comply with the requirements of the ISM Code”. Furthermore, they are
also required to provide copies of the Document of Compliance (DOC) and Safety Management
Certificate (SMC) to the Charterers, being any failure on this Clause on the Owners account.
- Clause 45 – International Ship and Port Facility Security Code (ISPS Code) / Maritime
Transportation Security Act (MTSA): this Clause is divided into three sub-clauses:
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a) The first sub-clause deals with the requirements of the Owners and the Charterers to
comply with the ISPS Code “and the relevant amendments to Chapter XI of the SOLAS” as
well as with the MTSA when trading between US Ports or sailing through their national
waters.
Furthermore, it is indicated that Owners must provide the Charterers with the ISSC if
requested and the contact details of the CSO, adding the compliance of these
requirements is a strict obligation on the Owners, being them liable for loss, damages,
expenses or delays so far caused.
b) Contrary than in the previous sub-clause, it is here explained that Charterers must provide
the Owners with all necessary information to comply with the ISPS Code and the MTSA,
ensuring that any sub-Charterer, if “permitted under the terms of this Charter Party”, will
also provide all requested information to the Owners – there is even a special provision
to be added in all sub-charters.
Therefore, it is also detailed that Charterers are liable of any loss, damage, expense or
delay caused by failing on this sub-clause.
c) This last sub-clause deals with the responsibilities arising from the compliance of the ISPS
Code and the MTSA, being the Owners responsible for all ship-related matters and the
Charterers for all port-related matters.
- Clause 46 – Sanctions: this Clause is divided into four sub-clauses:
a) It is explained that the Owners “shall not be obliged to comply with any orders” from the
Charterers that can bring the vessel “to any sanction or prohibition” imposed by
whatsoever governmental organization basing on their “reasonable judgement”.
b) During any employment that carries a sanction to the Vessel, then Owners “have the right
to refuse to proceed with the employment”, having the Charterers forty-eight hours to
provide alternative voyage orders. In case of failure, then Owners “may discharge any
cargo already loaded at any safe port”, being the Charterers responsible of all extra-costs.
c) Following the same line of the previous sub-clause, it is here stated that Charterers have
to indemnify the Owners of “all claims (…) brought by the Owners of the cargo and/or the
holders of Bills of Lading and/or sub-Charterers” in case the sub-clause “b)” applies.
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d) To conclude, it is pointed out that Charterers are responsible to include this Clause “into
all sub-charters issued pursuant to this Charter Party”.
- Clause 47 – BIMCO Designated Entities Clause for Charter Parties: another Clause divided in
many sub-clauses – seven in this case:
a) It is specified that this Clause applies to persons or entities whose activities are restricted
and are identified “under United Nations Resolutions, (…) the European Union or the
United States of America”.
b) Further to the previous sub-clause, both Owners and Charterers are required to warrant
that “at the date of this fixture and throughout the duration of this Charter Party” they
are not subject to the designation specified in sub-clause “a)”.
c) It is pointed out that in case any of the parties breaks this warranty, the innocent party
“shall comply with the laws and regulations of any Government to which (…) is subject”
and any guidance provided. However, in case of lacking that directions, then there is
provided the flexibility to the innocent party to terminate the contract and discharge the
cargo.
d) It is specified that if any party ever acts as per this Clause, it does not mean a breach of
any other Clause of the contract.
e) This provision states that any party “shall not be required to do anything which
constitutes a violation of the laws (…) of any State to which either of them is subject”,
taking into account the difficulty of these cases where legal advice will be most likely
needed.
f) In case that any party breaches the warrant of the sub-clause “b)”, then it shall indemnify
the innocent party against “all claims, losses, damage, costs and fines”.
g) To conclude, it is pointed out that Charterers are responsible to include this Clause “into
all sub-charters issued pursuant to this Charter Party”.
- Clause 48 – BIMCO North American Advance Cargo Notification Clause for Time Charter Parties:
This Clause applies when the Vessel under the charter party carries cargo destined or passing
through US or Canada ports and is divided into four sub-clauses:
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a) This first sub-clause states that “the Charterers shall comply with the current US Customs
regulation (19 CFR 4.7) or the Canada Border Services Agency regulations (Memorandum
D3-5-2” as well as hold a Standard Carrier Alpha Code (SCAC) or the Canadian Customs
Carried Code and an International Carrier Bond (ICB).
Finally, it is also pointed out that all cargo must be declared “by Automated Manifest
System (AMS) to the US Customs or by Automated Commercial Information (ACI) to
Canadian customs”.
b) Since the Charterers are responsible for the cargo carried, this sub-clause then indicates
that they “assume liability for and shall indemnify, defend and hold harmless the Owners”
against any claim due to any Charterers’ failure to comply with the sub-clause “a)”.
c) In case the Charterers’ ICB is used for anything which is a clear responsibility of the
Owners, then the Owners are the party that shall assume the claim.
d) To conclude, it is stated that even though the Charterers assume the role of carriers for
this Clause, it “shall be without prejudice to the identify of carrier under any bill of lading”.
- Clause 49 – BIMCO U.S. Census Bureau Mandatory Automated Export System (AES) Clause for
Time Charter Parties: this Clause shall only apply when the Vessel loads cargo in a US port and is
divided into four sub-clauses:
a) It is indicated that “the Charterers shall comply with the current US Census Bureau
Regulations (15 CFR 30)” as well as hold a Standard Carrier Alpha Code (SCAC) and an
International Carrier Bond (ICB). To conclude, al cargo loaded must be submitted in an
“export ocean manifest by Automated Export System (AES)”.
b) With the same wording as in the Clause 48 “b)” , it is pointed out that the Charterers
“assume liability for and shall indemnify, defend and hold harmless the Owners” against
any claim due to any Charterers’ failure to comply with the sub-clause “a)”.
c) As in the Clause 48 “c)”, in case the Charterers’ ICB is used for anything which is a clear
responsibility of the Owners, then the Owners are the party that shall assume the claim.
d) To conclude this Clause, it is pointed out that even though the Charterers assume the
role of carriers for this Clause, it “shall be without prejudice to the identify of carrier under
any bill of lading”.
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- Clause 50 – BIMCO EU Advance Cargo Declaration Clause for Time Charter Parties 2012: this
provision represents the equivalent of the US customs notification for the European Union and
is divided into two sub-clauses:
a) The first sub-clause explains that, in case the Vessel carries cargo loaded, discharged or
in transit at or for any EU port, “the Charterers shall (…) comply with the requirements of
the EU Advance Cargo Declaration Regulations”, having in their own name an Economic
Operator Registration and Identification (EORI) number and arranging export and import
declarations.
b) As it is found in the Clause 48 “b)” and 49 “b)” , it is stated that the Charterers “assume
liability for and shall indemnify, defend and hold harmless the Owners” against any claim
due to any Charterers’ failure to comply with the sub-clause “a)”.
- Clause 51 – Ballast Water Exchange Regulations: it is explained that the Owners shall comply
with ballast water exchanges required by any coastal state “at the Charterers’ time, risk and
expense”.
- Clause 52 – Period Applicable Clauses: this Clause only applies if the period of the contract
exceeds five months, the following sub-clauses shall apply:
a) This sub-clause sets out that if Charterers provide instructions for a last trip “on a ballast
voyage to the place of redelivery” and during its duration the contract comes to its end,
then “Charterers shall have the use of the Vessel (…) at the same rate or the prevailing
market rate, whichever is higher” until the completion of this last voyage.
b) Drydocking: if mutually agreed between the parties, the Vessel will have the option to be
drydocked “for bottom cleaning and painting and/or repair as required by class” among
other possible works.
c) Off-hire: for any period the Vessel is considered off-hire, Charterers have then the option
to add it to the Charter duration by complying with some time conditions.
d) Charterers’ Colors: this sub-clause allows the Charterers to fly their own house flag and
paint the Vessel as they wish, having to repaint the Vessel “in the Owners’ colors before
termination of the Charter Party”.
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- Clause 53 – Commissions: this Clause sets out the two different commissions payable. The first
of them “is payable by the Vessel and the Owners to (…) on hire earned”; the second one, which
is called “address commission”, is stated to be deducted by the Charterers on payment of the
hire earned.
- Clause 54 – Law and Arbitration: the aim of this Clause is to provide, from the beginning of the
contract, the law that will be applied in case of disputes and the manner they will be resolved.
For that, four alternatives are provided:
a) New York: the option by default if the parties fail to agree. As in previous NYPE forms,
three persons – one chosen by each party and a third by the two so chosen – shall
arbitrate the dispute “in accordance with the rules of the Society of Maritime Arbitrators,
INC. (SMA)”. However, if the claim is made for less than 100.000 USD “the arbitration
shall be conducted before a sole arbitrator in accordance with the Shortened Arbitration
Procedure of the SMA”.
b) London: in this case, the contract “shall be governed (…) in accordance with English law
and any dispute (…) shall be referred to arbitration (…) in accordance with the Arbitration
Act 1996 or any statutory modification” and in accordance with the London Maritime
Arbitrators Association (LMAA) Terms.
Regarding the arbitrators, the process is slightly different than the New York’s. In this
case, the party that refers a dispute “shall appoint its arbitrator and send notice (…) to
the other party requiring the other party to appoint its own arbitrator within fourteen
calendar days”. If this other party fails to the appointment, then the first party “may
appoint its arbitrator as sole arbitrator”. Nevertheless, the parties can vary this wording
to appoint an agreed sole arbitrator if they wish so
To conclude, if the claim does not exceed the sum of 100.000 USD “the arbitration shall
be conducted in accordance with the LMAA Small Claims Procedure”.
c) Singapore: this place is newly introduced in this NYPE form due to the collaboration of
the SMF for its update, giving the choice to govern the contract in accordance with
Singapore or English law and resolving its disputes in accordance with the Singapore
International Arbitration Act and the Arbitration Rules of the Singapore Chamber of
Maritime Arbitration (SCMA).
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As in the London option, the party that refers a dispute “shall appoint its arbitrator and
send notice (…) to the other party requiring the other party to appoint its own arbitrator
within fourteen calendar days”. If this other party fails to the appointment, then the first
party “may appoint its arbitrator as sole arbitrator”. As aforesaid, the parties can vary this
wording to appoint an agreed sole arbitrator if they agree.
To finish the wording of this option, it is stated that if the claim does not exceed the sum
of 150.000 USD “the arbitration shall be conducted before a single arbitrator in
accordance with the SCMA Small Claims Procedure”.
d) A last option is provided to the parties, where they can agree a place whose laws and
procedures shall be applied to resolve any dispute.
- Clause 55 – Notices: this provision deals with how and where to any notice or communication
should be given between the parties, considering the option of using an email address – adapting
the Clause to modern times and stating that any communication will be considered to be given
“on the date of actual receipt by the party to which it is addressed”.
- Clause 56 – Headings: this Clause clarifies that all clauses’ headings are only labels that generally
describe the content of the clauses but are not subject to any interpretation of the contract.
- Clause 57 – Singular/Plural: this last Clause indicates that, depending on the context, any
singular term shall be made plural if required.
- Lines 101-102: these two final lines contain two blank spaces where the parties can introduce
the number of Clauses incorporated to the contract as “Rider Clauses”.
4.3 Appendix A (vessel description)
At the end of the main terms of the NYPE 2015 it is incorporated an Appendix A, entitled “Vessel
description”. The inclusion of this Appendix offers the Owners a full and easy to fill questionnaire
to provide the Charterers all necessary information about the Vessel which they may need during
the contract.
For that, the Appendix A is divided into seven different categories:
1. General Information: this section is used to indicate all basic information of the vessel,
from her name to his Call Sign and her Flag.
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2. Loadline Information: this second section is related to the maximum load lines of the
Vessel depending on its cargo condition – which can be found in the Plimsoll lines. In
addition, the Constant and the Freshwater Capacity are to be detailed in this section as
well.
3. Tonnages: the third category is destined to every considerable weight of the Vessel,
including the Gross and Net Tonnage, the Panama and Suez Canal Tonnage and the
Lightweight.
4. Dimensions: this fourth section of the Appendix is the most complete in terms of concepts
and length. In it, many characteristics of the holds of the Vessel are detailed to provide
the Charterers the maximum information to take into consideration when planning the
loading of any cargo. In addition, it can be also found some ballast condition details and
cranes specifications.
5. Bunkers, Speed and Consumption: this section is destined to define all necessary
particulars of the bunker spaces and the type of fuel used for the main and auxiliary
engines and well as the Vessels speed and consumption.
6. Crew: the sixth category of this Appendix is destined to detail the number and nationality
of Officers and Ratings, including the name and nationality of the Master.
7. Certificate Expiry Dates: this last section is destined to declare the expiry dates of the
main certificates of the Vessel such as the P&I, the SMC and the ISSC among many others.
4.4 Key features of NYPE 2015
After the extensive analysis of all the Clauses of the NYPE 2015 and its Appendix performed in
the previous sub-chapter, it is now time to carry out a summary of the main changes and the key
features of the major revision of the most commonly used time charter party form for the dry
maritime sector.
To achieve a strong level of global acceptance, the NYPE 2015 incorporates some of the most
frequently used rider clauses added to previous forms as well as some changes into the main
body of the contract to avoid the users the necessity to overlook key clauses or, on the other
side, to add some which may create conflict with other provisions.
Chapter 4. The NYPE 2015
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Therefore, even though almost all clauses’ wording has been revised, we shall focus on the most
important changes and additions of this form – which are mainly done due to the influence of
BIMCO and the SMF.
The first novelty to notice is the brevity of the preamble, which include only some of the main
characteristics of the Vessel and the identification of the parties. The reason for this short
preamble is that, at the end of the main terms of the contract, it is included an Appendix A whose
aim is to provide the Owners with a clear questionnaire to set out all characteristics of the Vessel
in a comprehensive way for the Charterers in order to perform a correct use of the ship.
Then, once the preamble is over, we shall go straight to the main updates and key changes of the
Clauses of this form that characterize the nature of this charter party.
The first of these characteristics, which is found in the title of the Clause 1 “Duration/Trip
Description”, is the option given to the parties to choose whether the agreement is for a period
or trip charter party. Furthermore, this first clause was expanded by joining some different
Clauses from the NYPE 93 such as Trading Limits, Berths and Sublet as well as the reintroduction
of an optional NAABSA provision, which was withdrawn at the previous form.
On Clause 2 “Delivery”, another key feature can be found in the split of the Owners’ obligation
to deliver the ship in a seaworthy condition from her cargo readiness condition, being amended
to reflect the common practice of the industry to deliver the Vessel in a different port different
from where she will first receive cargo. In addition, this Clause also deals in its sub-clause “d”
with the restriction of any further employment of the ship immediately prior her delivery as well
as in the redelivery (dealt in its reciprocal Clause 4 “Redelivery”) that can delay the dates
accorded by the parties.
The following novelty of this contract can be found in Clause 6 “Owners to Provide”, where a full
paragraph is exclusively destined to deal with the obligation of the Owners to provide and
maintain Certificates of Financial Responsibility for oil pollution. However, it is important to
consider that this obligation is only made at the start of the charter, being the parties intended
to find a common solution for its renewal.
Another Clause where plenty of changes are found is the Clause 9 “Bunkers”, which has been
adapted for both period and trip charter options covering many different details with the aim to
provide a modern and comprehensive Clause.
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Split into seven different provisions, this Clause deals with quantities and prices; bunkering
timelines, operations and sampling; quality and liability; ECA trading and redelivery’s quantities
and grades to adapt it to modern environmental rules – including low sulphur requirements.
In Clause 10, sub-section “b) Hold Cleaning/Residue Disposal”, another important update to
modern legal guidelines is able to be found with the accordance of the substances used to
perform the cleaning of the holds to MARPOL Annex V; in fact, something very similar happens
in Clause 29 “Solid Bulk Cargoes/Dangerous Goods” where it is mentioned the IMBSC in case of
loading any solid bulk cargo on board.
Moving to the Clause 11 “Hire Payment”, many clarifications were made in order to ease the
comprehension of some of the particularities of this Clause as well as to update it to recent legal
decisions.
The first of these changes is to leave open to the parties to agree the currency in which hire is to
be paid, reflecting a global use of the form. Then, another big change of this Clause is found in
the sub-section “b) Grace Period”, being no longer considered an “anti-technically” provision and
unqualifying the events by which this shall occur, meaning that any failure from the Charterers
to make punctual payment of hire will result in breach of the charter party.
Following the previous paragraph, the sub-section “c) Withdrawal” provides the Owners a more
balanced provision by making the Charterers to compensate the Owners of any loss suffered as
a result of the early termination of the contract, covering its remaining period. Finally, the sub-
section “d) Suspension” provides an effective method to bring commercial pressure to a
Charterers who might usually be late with hire payments by allowing the Owners to suspend the
performance of the ship until the Charterers obligations regarding those payments are fulfilled.
Clause 12 “Speed and Consumption” is another majorly reworded Clause, containing many
updates to adjust it to some market provisions and current practices, being some of the most
important features the inclusion of a continuous warranty of the capability speed performance
of the Vessel throughout the whole contract duration; the performance of the route according
to a weather routing service and the right of deviation of the Master and the limitation of the
Charterers’ claims to compensation for time lost as a result of the underperformance or the cost
of any additional fuel consumed.
Chapter 4. The NYPE 2015
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Moving forward to Clause 30 “Hull Fouling”, a special provision was included to this form and
destined exclusively to cover this event to sort out responsibilities of the maintenance of the hull
state depending on different issues. In this line, several responsibilities can be transferred to the
Charterers under some special circumstances – never considered before in any previous NYPE
form.
In Clause 32 “Electronic Bills of Lading” it is found one of the best examples of the modernization
of this NYPE form, considering the emission of these documents more practical than any printed
document – however it allows the Charterers whether this option shall be considered or not.
The next Clause that shall be taken into account is the Clause 34 “War Risks”, which has been
replaced from the NYPE 93 to this form by the BIMCO’s standard War Risk Clause, known as
CONWARTIME, which has its basis on whether an area is dangerous to be navigated and there is
existence of any attack – happening the war event before or after the signature of the contract,
dealing with premium insurances and the liberties of the Vessel as well. Something quite similar
is seen in Clause 39 “Piracy”, added to this form with its wording taken from the BIMCO Piracy
Clause from Time Charter Parties – revised in 2013 to reflect industry experience and legal
developments.
Moving back to Clause 38 “Slow Steaming”, here it is another example of the modernization of
this charter party. This Clause, as its own title reveals, deals with the possibility of the Charterers
to order the Vessel to navigate at a reduced speed considering any claim as well that Owners can
face from third parties due to their strict obligation to prosecute voyages with utmost despatch.
Through its six sub-clauses, this Clause deals with many details such as the condition of the
engines for operating at slow steaming, their consumption and the afore-mentioned risk of
further claims to the Owners.
Moving quite forward, in Clause 44 “ISM” and Clause 45 “ISPS/MTSA” it is found the introduction
of two of the most important legal regulations of international maritime law, such as the ISM and
the ISPS, which evidences the globality of the form in relation with the maritime industry.
Furthermore, and with the aim to conserve its North American essence, it is also introduced the
MTSA as one of the legal regulations to be considered.
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In line with the previous Clause, some other American and European mercantile regulations are
introduced in Clause 48 “North American Advanced Cargo Notification”, Clause 49 “U.S. Census
Bureau Mandatory Automated Export System (AES)” and Clause 50 “EU Advanced Cargo
Declaration Clause for Time Charter Parties 2012”, which provides an idea of the legal links of this
charter party.
To conclude, due to the increasing problems of invasive marine species mainly carried in ballast
waters of merchant ships, this form includes a Clause 51 “Ballast Water Exchange Regulations”,
trying to adjust it to as much coastal states with ballast water regulations.
4.5 Conclusions
The New York Produce Exchange 2015 charter party is the most important section and the
centrepiece of this FDP - in fact, of its own title. Its analysis has taken nothing less than twenty-
five pages, added to all the analysis and comparisons of its three previous versions. However, all
this journey would not be complete if, after reaching in such a deep manner in this topic, useful
conclusions were not drawn.
The first concept that needs to be present during the whole summary is to consider the objective
of the update of the NYPE form, which was no other than to create an internationally accepted
and more balanced time charter party form between Owners and Charterers by reflecting
changes in commercial practices and legal decisions of the maritime sector. Furthermore, the
previous form of the New York Produce Exchange charter party, the NYPE 93, failed to become a
widely accepted form since Charterers still used the NYPE 46 form with many added rider clauses
depending on their trade.
In fact, in their own press release, BIMCO described the goal of the major revision of the NYPE
“to produce a dry cargo charter party that reflects contemporary commercial practice and legal
developments that have taken place in the past twenty years (…) which takes proper stock of the
most commonly Applied amendments and additional clauses used by practitioners in the dry
cargo sector”.
Summarizing, the promotion of such a huge revision was due to the lack of an intermediate form
between Owners and Charterers that protected their interests in a balanced manner. - therefore,
it is easy to identify the role of the ASBA (Charterers) and BIMCO (Owners) for this purpose.
Chapter 4. The NYPE 2015
137
In addition, a deep consultation with the shipping industry was performed during several years
to ensure that current commercial practices were reflected in the form.
However, there is something that cannot be forgotten when trying to create a charter party form
with global appeal. Even though that Europe and America were the two main engines of the
maritime industry in the past, a third wheel has become the main sponsor of the global trade in
the last decades: Asia. Thus, this major revision was going to be incomplete without its inclusion,
which was finally translated with the collaboration of the SMF in the project and the recognition
of Singapore as an official seat of arbitration - a defining milestone of its presence as a key node
of the global maritime network.
Moreover, it would be also worth to glance at the declarations made by the heads of the main
organizations that carry this revision out, which are collected below.
Starting with Mr. Søren Larsen, one of the BIMCO’s Deputy Secretary General, said that “We are
delighted that our close cooperation with ASBA and SMF has resulted in the completion of this
major project to produce a much improved NYPE that will be of great benefit to the industry."33
Then, his colleague Ms. Inga Froysa, Chairperson of the BIMCO NYPE revision sub-committee,
added that “Users of the current NYPE form will certainly still recognise and be familiar with the
core elements of the time charter party, but they can also expect to see some significant changes
and improvements.(…) Notably, the contract incorporates many of the rider clauses that are
routinely added to the existing NYPE – but we have made sure that any new clauses incorporated
into the new NYPE are relevant, balanced and consistent with the other provisions.(…) Overall,
our aim was to create a modern NYPE with global appeal – and I believe that this has been
achieved.”
33 The Baltic and International Maritime Council. Major revision of NYPE Time Charter Party. Copenhagen: October 15th, 2015.
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On the other side, Mr. Nigel Hawkins, Chairman of the ASBA drafting committee, said that “The
1993 NYPE Charter Party was ripe for updating. ASBA is therefore pleased that with our friends
at BIMCO and the Singapore Maritime Foundation we have agreed the wording of a NYPE fit for
the present day. ASBA hope that the industry will find this new NYPE a clear and logical document,
and, that the industry will note some familiar language contained in past NYPE documents.”
To conclude, Mr. Michael Chia, Chairman of SMF explained “The revised NYPE is the first
international shipping form that is a collective effort spanning the globe involving ASBA, BIMCO
and SMF. With the extensive global industry stakeholder consultation, we believe that the end
product is a contact that better meets user needs and will see quick acceptance and adoption”.34
Nevertheless, not all the maritime industry’s organizations showed this well disposition towards
the updates of this revision. In fact, considering that many added clauses to the main body of the
form were BIMCO standard clauses, The Charterers P&I Club harshly criticized the NYPE 2015 in
its “Circular 004-2015”. 35 In this respect, the Club considered these clauses to be perceived in
the market as “Owner friendly”, which was translated as a step back for the Charterers’ interests,
pointing also out that careful attention shall be paid to them since their wording was not exactly
as those standard clauses.
Even though these additional clauses can help the Charterers to deal with many new issues arisen
over recent years which could be easily missed and build a quite up-to-date form, these kinds of
terms are usually updated so the NYPE 2015 can quickly become out of date, being easier to only
having to update rider clauses. Moreover, as commented on the paragraph before, some of these
clauses are BIMCO standard clauses which may benefit the common law position of the Owners,
having the Charterers to pay special attention to leave them out.
34 The Singapore Maritime Foundation. Launch of NYPE 2015 – A Joint Effort by ASBA, BIMCO and SMF on the Industry’s Most Widely Used Standard Form of Dry Cargo Time Charterparty. Press release. Singapore: October 16th, 2015.
35 The Charterers P&I Club. Circular 004 2015 – New NYPE 2015 – A Charterer’s Perspective – Circular to Assureds.
The MECO Group. London: December 2015.
Chapter 4. The NYPE 2015
139
Another disadvantage of the addition of these new clauses is that some of them could cause a
“Clause Clash” with other existing clauses already present into the main body of the form, leading
to confusions about which terms shall apply in case of disputes. On the other side, these
increment of clauses in the main body could give the parties a false impression of total coverage
of all possible issues when there may be some not prevised (e.g., bribery and corruption).
From a Charterers’ point of view, the Club is very reticent to recommend its customers the use
of this revision of the NYPE, justifying that Charterers shall negotiate to defend their trades but
including their own rider clauses con lead to conflicts and interpretation misunderstandings. In
addition, the objective of the new BIMCO standard clauses added to the form is no other that
creating “a modern NYPE with global appeal”, which are to Charterers’ detriment.
To sum up, the NYPE 2015 charter party form has many advantages and disadvantages depending
on the point of view, therefore anyone who intends to use it for its own business shall do it very
carefully in consultancy with experts.
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Conclusions and Final Assessment
141
Conclusions and Final Assessment
This FDP shall be finished with a chapter dedicated to introducing and explaining the conclusions
extracted throughout the paper. The journey of this FDP has been done in a funnel-format as it
was stated in the Introduction: it started by performing a general overview about the actual
maritime market and its evolution over the last few years; the following chapter explained some
basic concepts about charter parties, their classification and some key terminology to consider
as well as a description of the three most important maritime organizations that contributed to
their development; the third chapter explained the basis and history of the NYPE charter party
and its evolution during its different versions; the final chapter was fully dedicated to the NYPE
2015 charter party, the heart of this paper, describing its key features and main changes and
trying to state its success or failure for the maritime industry.
Thus, the conclusions that this FDP has led to are the following:
✓ The results of the financial crash of 2008 were still present at the beginning of 2015, when the
economy’s situation was not at its best stage due to some strive markets and the unpredictability
of China’s economy, which has become the main actor of global trade and the major indicator of
shipping development – despite its volatility.
✓ The GDP growth rates are not forecasted to improve in the next years since demand is not
expected to increase; therefore, fleet utilization rates should be raised (e.g. with scrapping) to
lower the supply and strengthen freights. During the following years, shipowners will keep
finding strong opposition to find profitable the maritime freight market due to the unbalanced
supply and demand levels, added to the compliance of the new IMO 2020 Sulphur Cap.
✓Due to the historical horrible situation of the maritime economy, BIMCO provided a market
analysis called “Road to recovery” in May, 2016, to state the actions needed for the shipping
markets to recover and to track their progress. The model was revised and updated several times
to align it to contemporary market conditions, but a general emphasis on scrapping was always
highlighted.
✓ The tanker trade sector (which involves crude oil and oil products) experienced strong freights
due to the drop of oil prices and the low growth of the supply, resulting in a general profitable
period for this business in 2015. However, from 2016 to 2018, the demand fell heavily and the
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supply side increased considerably, leading to horrific years for the tanker shipping market due
to the volume of the oil global stocks – until they were decreased and the over-supplied trade
lanes are not redressed, sea oil trading would not awake any interest and low freights are
expected to govern this business.
✓ In 2015, the container market faced a very unbalanced situation due to a four-year high supply-
side growth rate combined with a three-year low rate of demand, claiming for a severe
readjustment to overcome this situation. Nevertheless, the merge of large container vessels
companies combined with low newbuilding rates and an all-time high demolition of ships
improved the balancing of the marker. However, twenty new vessels of 22.000 TEUS were
ordered in 2017, heavily increasing the supply-side.
✓ To compensate this, BIMCO stated that the GDP growth of advanced economies plus China’s
subsidy are going to be the clues to stabilize this awful situation. In addition, it is also necessary
to free the trade to let it develop at its natural pace, contrary to the effects of the war between
the USA and some Asian countries.
✓ Even though charter parties can be defined in many different ways, they are nothing but the
proof of the conclusion of a fixture, for a specific voyage or period of time, becoming the legal
link between two contractual parties and requiring the fulfilment of the mutually agreed terms,
conditions and exceptions under the law in force, which will govern the deal. They can be divided
into voyage charters, contracts of affreightment, time charters and bareboat charters.
✓ Voyage charters are those in which the Owners perform one or more designated voyages from
a load to a discharge port (or facility) in return of a payment of freight. In these type of charters,
all nautical and operating management remain on the Owners, being the Charterers in charge of
placing the cargo at the designated place and paying the hire.
✓ Contracts of Affreightment are agreements including multiple voyages together in one single
contract in which Owners shall carry a specific amount of cargo during a period of time for a fixed
price per ton. Even though some elements may be introduced to distinguish it from voyage
charters, the responsibilities of each party are the same. These contracts allow the Owners to
optimize their fleet and achieve its best performance and efficiency level whilst permits the
Charterers to ensure that all cargo of a particular trade will be covered until stocks are over for a
invariable price.
Conclusions and Final Assessment
143
✓ Time charters, such as the NYPE 2015, are those contracts under which the vessel’s employment
is set under the legitimate orders of the Charterers, who in return of an agreed periodical hire
and the payment of some specific costs, shall have the right to utilize all available spaces to carry
any type and quantity of goods permitted in the contract. However, the possession of the vessel
remains with the Owners, who provide the crew and pay the ordinary costs of the ship. In these
contracts, the nautical management is the responsibility of the Owners whilst the Charterers are
in charge of the commercial management of the Vessel.
✓ Time charters allow Owners to have their vessels employed during large periods of time,
securing future income, whilst Charterers who need to increase their capacity volume during a
certain period of time but do not want to purchase a Vessel might find these contracts
interesting.
✓ Bareboat Charter is a method by which the possession of the Vessel is fully given to the
Charterers, who provide crew, pay all running costs and undertake the title of shipowners,
leading to a lease of the Vessel for a stipulated period of time which sometimes include a
purchase option at its end. In return of a hire, Charterers assume all nautical and operating
management of the ship. The main use of this Charters is the financing of now-build ships by
financial organizations with no other interests in shipping business than investment.
✓ The terms of a charter party can be sorted out by many different criteria. Nevertheless, two of
the most widely accepted are by the “stage of the terms”, which include the “Main Terms” and
the “Charter party Terms”, and by their “explicitness”, which include the “Express Terms” and the
“Implied Terms”.
✓ The three main organizations who have historically contributed to the formation of charter
parties, including the NYPE 2015, are the BIMCO – with European origin and mainly representing
Owners, and the ASBA – from American and predominantly by Charterers. Nonetheless, the SMF
(from Singapore) shall be added to this team by representing the great continent of Asia to the
development of the latest revision of the NYPE.
✓ The New York Produce Exchange was an organized market place in the heart of the city of New
York, whose purpose was to provide a freely regulated trade of commodities far from any chaos
or unfairness. Mainly represented by American shippers, Charterers and traders who soon
became powerful in economic terms and tired of using old charter party form which were Owner-
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friendly, a form that defended their interests was developed in the early 20th century, being born
the NYPE 1913 charter party, which has been revised many times during history: in 1921, 1931,
1946, 1981, 1993 and lately in 2015.
✓ The NYPE 46 was the very first successful time charter party amended by the American traders,
being yet widely used in the dry cargo sector due to the amount of the decisions that the courts
have made during more than seventy years as well as the conservative nature of the shipping
business community. The form is divided into a preamble, which includes thirty-four lines that
set the basis of the agreement, and twenty-eight clauses that develop the details of the contract.
✓ The NYPE 46 form is a simple and quite effective charter party that has been widely legally
interpreted by many law experts and which was issued in a historically favorable date for the
interests of Charterers worldwide, when trade started to grow and economy burst after the
Second World War.
✓ The first revision of the NYPE 46 form was launched on June 12th, 1981, under the name NYPE
81 or ASBATIME. Carried out by the ASBA, this version included a longer preamble with sixty-two
lines, twenty-seven clauses in the main body and an Appendix with eleven rider clauses that
could be added if the parties found it necessary.
✓ The form followed the same vein of the NYPE 46, with small clarifications in many clauses and
emphasizing or even rectifying some terms. However, by the time this revision was launched, the
industry was already used to its previous version, where the parties added their own additional
clauses in order to protect their interests and trying to minimize the risk of unforeseen events by
using a new form. To sum up, the ASBATIME did not have the expected impact on the maritime
industry.
✓ Since the NYPE form was the most commonly time charter party used in the maritime business,
the ASBA, the BIMCO and the FONASBA launched on September 14th, 1993, the following revision
of the form: the NYPE 93. This new version included a preamble of twenty-two lines, a main body
of forty-six clauses and an Appendix A to freely provide further data of the Vessel employed.
✓ The product was a competitive and well-balanced charter party form, offering a fair contract for
the parties involved thanks to the collaboration of three of the most important shipping entities
of the maritime business at that time.
Conclusions and Final Assessment
145
✓Even though the NYPE 46 was still the most used version, the NYPE 93 set the basis of a charter
party form where parties with different interests could find a common solution.
✓ In 2015, the ASBA, the BIMCO and the SMF launched the latest update of the NYPE charter party
form, which was the major update ever done, which included many legal developments and
contemporary commercial practices.
✓ This version of the NYPE is the most complete in terms of length and clauses. It is divided into
three sections: a preamble of seventeen pages, a body with fifty-seven clauses and an Appendix
A, destined to provide a detailed description of the Vessel chartered.
✓ The objective of the launch of the NYPE 2015 was to create an internationally accepted and more
balanced time charter party form, trying to substitute the old-fashioned but most used NYPE 46.
For that, the three aforementioned organizations, which represent the three main continents
that rule the maritime economy, performed a huge consultation to the industry and produced
and up-to-date and modern form of the contract.
✓ Even though only time will provide an overview of the general acceptation of the NYPE 2015,
many organizations quickly informed their members or customers of the characteristics of this
new version and advised about the risks of using it for their trades.
After exposing the conclusions which I have been able to reach from the development of this
paper, I would not like to finish it without providing my personal opinion of the NYPE 2015 charter
party form. From my humble point of view, I would take the risk to state that, even though some
items are not included in this form and shall be considered to be added, the NYPE 2015 generally
meets its objective to become a well-balanced and up-to-date charter party since the
cooperation of the three aforementioned organizations make sure that all perspectives and
approaches are taken into account. However, this does not mean that it can be used as a
complete charter with no necessity to be reviewed and carefully treated, as any other charter
party form.
The best advise that can be given to chartering companies is, under my personal consideration,
to maintain their own specific rider terms that have worked for their services and which they feel
more comfortable with. However, they may find now in the NYPE 2015 a new tool to update
those specific rider terms to keep them up-to-date as well as to use this form as a crosscheck in
order to make sure that all important issues are duly covered to meet their specific needs.
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Regarding the industry’s general acceptation of the NYPE 2015, only time will be able to provide
a clear answer. Even though it only depends on its uptake, it must be considered that the creation
of a complete charter party form that satisfies the needs of the whole maritime industry may be
a too challenging ambition since every organization will only care of its own interests. However,
even though it was not the main goal of the BIMCO, the ASBA and the SMF joint cooperation,
they may have provided a very powerful tool to any company or organization dedicated to the
chartering business that may help them to create their own specific terms and keep them
updated so that anyone can extract those that meet their interests in a most efficient way.
Sources
147
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Practical Shipping Guide. Lloyd’s Shipping Law Library. Abingdon, Oxon: Routledge, 2018. ISBN:
978-1-138-82694-6.
[12] Power, V. EC Shipping Law. 2nd Edition. London: Lloyd’s of London Shipping Press, 1998. ISBN: 978-
1859781784.
[13] Stopford, Martin. Maritime Economics. 3rd Edition. Lloyd’s Shipping Law Library. Abingdon, Oxon:
Routledge, 2009. ISBN 0-203-89174-0.
[14] Todd, Paul. Principles of the carriage of goods by sea. 1st Edition. Abingdon, Oxon: Routledge,
2016. ISBN: 978-0-415-74374-7.
[15] Tsoudis George N. The shipbroker’s working knowledge. 1st Edition. St Peters Vicarage, Wightman
Road, London N8 0LY, UK, 2015. ISBN: 978-1-910714-09-6.
Publications
[16] The Association of Ship Brokers & Agents (U.S.A.); The Baltic and International Maritime Council;
The Federation of National Associations of Ship Brokers and Agents. The NYPE 93 Time Charter
party. New York: September 14th, 1993.
Form available at: http://www.fleetle.com/a/d/pdf/nype_93.pdf.
[17] The Association of Ship Brokers & Agents (U.S.A.); The Baltic and International Maritime Council;
The Singapore Maritime Foundation. The NYPE 2015 Time Charter party. New York: June 3rd, 2015.
Sample copy of the form ¡ available at: https://www.bimco.org/-/media/BIMCO/Contracts-and-
Clauses/Contracts/Sample-copies/Sample-copy-NYPE-2015.ashx
[18] The Association of Ship Brokers & Agents (U.S.A.); The Baltic and International Maritime Council;
The Singapore Maritime Foundation. The NYPE 2015 Time Charter party Explanatory Notes. New
York: June 3rd, 2015.
[19] The Association of Ship Brokers & Agents. The NYPE 81 Time Charter party or ASBATIME. New
York: June 12th, 1981.Form available at: http://www.fleetle.com/a/d/pdf/asbatime_nype_81.pdf
[20] The Baltic and International Maritime Council. 2017 was year of change in shipping – caution
required in 2018. BIMCO Reflections 2018. Pages 4-5.
Sources
149
[21] The Baltic and International Maritime Council. Global shipping scouts for future growth. BIMCO
Reflections 2019. Pages 12-13.
[22] The Baltic and International Maritime Council. Major revision of NYPE Time Charter Party.
Copenhagen: October 15th, 2015.
[23] The Baltic and International Maritime Council. Supply and demand trending off-balance. BIMCO
Reflections 2020. Pages 12-13.
[24] The Baltic and International Maritime Council. The shipping market in 2015 and looking forward.
BIMCO Reflections 2016. Pages 6-8.
[25] The Baltic and International Maritime Council. The shipping market in 2016 and looking forward.
BIMCO Reflections 2017. Pages 4-5.
[26] The Charterers P&I Club. Circular 004 2015 – New NYPE 2015 – A Charterer’s Perspective – Circular
to Assureds. The MECO Group. London: December 2015.
[27] The New York Produce Exchange. The NYPE 46 Time Charter party. New York: October 3rd, 1946.
Form available at: http://www.fleetle.com/a/d/pdf/nype_46_portrait.pdf.
[28] The Singapore Maritime Foundation. Launch of NYPE 2015 – A Joint Effort by ASBA, BIMCO and
SMF on the Industry’s Most Widely Used Standard Form of Dry Cargo Time Charterparty. Press
release. Singapore: October 16th, 2015.
[29] UNCTAD Secretariat. Charter Parties: A comparative analysis. Geneve, United Nations Publication,
October 1990.
[30] UNCTAD Secretariat. Review of Maritime Transport 2015. Geneve: United Nations Publication,
May 2015.
[31] United Nations Secretariat. United Nations Convention on Conditions for Registration of Ships.
Geneve, United Nations Publication. February 7th, 1986. Article 2.
Online Sources
[32] HandyBulk – Time Chartering. Accessed: September 24th, 2020.
Available at: <http://www.handybulk.com/timechartering>
[33] HandyBulk – New York Produce Exchange Form (NYPE). Accessed: February 11th, 2020.
Available at: <http://www.handybulk.com/what-is-new-york-produce-exchange-form-nype>
THE NYPE 2015 TIME CHARTER PARTY
150
[34] HandyBulk – ASBATIME. Accessed: April 06th, 2020.
Available at: < https://www.handybulk.com/asbatime>
[35] ShipInspection – New York Produce Exchange (NYPE). Accessed: February 18th, 2020.
Available at: <http://shipinspection.eu/new-york-produce-exchange-form-nype/>
[36] The North P&I Club – NYPE 2015 - The New Charter Party Form. Accessed: June 05th, 2020.
Available at: <https://www.nepia.com/articles/nype-2015-the-new-charter party-form/>
[37] BIMCO website – About us and our members. Accessed: November 05th, 2020.
Available at: <https://www.bimco.org/about-us-and-our-members>
[38] ASBA website – About. Accessed: November 05th, 2020.
Available at: <https://www.asba.org/about>
[39] SMF website – About us/our story. Accessed: November 05th, 2020.
Available at: <https://www.smf.com.sg/about-us/our-story/>
[40] BIMCO. Market analysis. Australian coal wins attention, but Indonesian exports to China have
fallen the most. Sand, Peter. Copenhagen: December 02nd, 2020. Accessed: December 03rd,
2020. Available at:
<https://www.bimco.org/news/market_analysis/2020/20201202_chinese_coal_imports_from_
australia_and_indonesia>
[41] BIMCO. Market Analysis. Container shipping: a surprisingly profitable year during challenging
times, but how long can it last?. Sand, Peter. Copenhagen: November 25th, 2020. Accessed:
December 05th, 2020. Available at:
<https://www.bimco.org/news/market_analysis/2020/20201125_container_shipping>
[42] BIMCO. Market analysis. Tanker shipping: worst not yet over as industry pays for strong second
quarter. Sand, Peter. Copenhagen: November 25th, 2020. Accessed: December 03rd, 2020.
Available at:
< https://www.bimco.org/news/market_analysis/2020/20201125_tanker_shipping>
[43] BIMCO. Market Analysis. Dry bulk shipping: China remains the driving factor, but coal policy is
disrupting the market. Sand, Peter. Copenhagen: November 24th, 2020. Accessed: November
29th, 2020. Available at:
<https://www.bimco.org/news/market_analysis/2020/20201124_4_dry_bulk_shipping>
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[44] The New York Times. A brick beauty bites the dust. Gray, Christopher. New York: August 21st,
2020. Accessed: March, 14th, 2020. Available at:
< https://www.nytimes.com/2014/08/24/realestate/new-yorks-produce-exchange.html>
Case Law
[45] Lidgett v. Williams (1845) 4 Harc 456,462; The Epsilon Rosa [2002] 2 Lloyd’s Rep. 81, 86.
[46] Ambatielos v. Grace Bros. (1922) 13 Ll. L. Rep. 227; Suisse Atlantique v. Rotterdamsche Kolen
Centrale [1967] 1 A.C. 361.
[47] The Oakworth [1975] 1 Lloyd’s Rep. 581.
[48] The Tichy ][1999] 2 Lloyd’s Rep. 11
[49] The Tichy (No. 2) [2001] Lloyd’s Rep. 10, reversed [2001] 2 Lloyd’s Rep. 403.
[50] Donaldson, J., The Berge Tasta [1975] 1 Lloyd’s Rep. 422.
[51] Lord Diplock, J., The Scraptrade [1983] 2 Lloyd’s Rep. 253.
[52] Lord Reid, The London Explorer [1971] 1 Lloyd’s Rep. 523.
[53] Lord Diplock, J.,Port Line v. Ben Line [1958] 1 Lloyd’s Rep. 290.
[54] Lord Hobhouse, The Hill Harmony [2001] 1 Lloyd’s Rep. 147.
[55] Mackinnon, L.J., Sea & Land Securities v. Dickinson (1942) 72 Ll.L.Rep. 159, page 163
[56] Heilbut. Symons v. Buckleton [1913] A.C. 30; De Lasalle v. Guildford [1901] 2 K.B. 215.
[57] Reardon Smith v. Hansen Tangen [1976] 2 Lloyd’s Rep. 621, 625, per Lord Wilberforce.
[58] Sailing Ship Garston v. Hickie (1885) 15 Q.B.D. 580 and The Aragorn [1977] 1 Lloyd’s Rep. 343.
[59] Dreyfus v. Parnaso [1959] 1 Lloyd’s Rep. 125.
[60] Mediterranean Salvage Towage v. Seamar Trading & Commerce (The Reborn) [2009] 2 Lloyd’s
Rep. 639.
[61] North West Metropolitan Regional Hospital Board v. Trollope & Colls [1973] 1 W.L.R. 601.
[62] Mance, J., The Niizuru [1996] 2 Lloyd’s Rep. 66, page 68.
THE NYPE 2015 TIME CHARTER PARTY
152
Annex 1. The NYPE 2015 sample form
153
Annex 1. The NYPE 2015 sample form
NYPE 2015
TIME CHARTER New York Produce Exchange Form©
November 6th, 1913 – Amended October 20th, 1921; August 6th, 1931; October 3rd, 1946; Revised June 12th 1981; September 14th 1993; June 3rd, 2015.
THIS CHARTER PARTY, made and concluded in . this . day of 20
Between of
as *Registered Owners/*Disponent Owners/*Time Chartered Owners (the “Owners”) of the Vessel described below
*delete as applicable
Name:
IMO Number:
Flag:
Built (year):
Deadweight All Told: metric tons
(For Vessel’s charter party description see Appendix A (Vessel Description)),
and Charterers of (the “Charterers”)
This Charter Party shall be performed subject to all the terms and conditions herein consisting of this main body including any additional clauses and addenda, if applicable, as well as Appendix A attached hereto. In the event of any conflict of conditions, the provisions of any additional clauses and Appendix A shall prevail over those of the main body to the extent of such conflict, but no further.
1. Duration/Trip Description
(a) The Owners agree to let, and the Charterers agree to hire, the Vessel from the time of delivery, for . within below mentioned trading limits.
(b) Trading Limits - The Vessel shall be employed in such lawful trades between safe ports and safe places within the following trading limits . as the Charterers shall direct.
NYPE 2015 TIME CHARTER
(c) Berths - The Vessel shall be loaded and discharged in any safe anchorage or at any safe berth or safe place that the Charterers or their agents may direct, provided the Vessel can safely enter, lie and depart always afloat.
(d) The Vessel during loading and/or discharging may lie safely aground at any safe berth or safe place where it is customary for vessels of similar size, construction and type to lie at the following areas/ports (if this space is left blank then this sub-clause 1(d) shall not apply), if so requested by the Charterers, provided it can do so without suffering damage.
The Charterers shall indemnify the Owners for any loss, damage, costs, expenses or loss of time, including any underwater inspection required by class, caused as a consequence of the Vessel lying aground at the Charterers’ request.
(e) Sublet - The Charterers shall have the liberty to sublet the Vessel for all or any part of the time covered by this Charter Party, but the Charterers remain responsible for the fulfillment of this Charter Party.
2. Delivery
(a) The Vessel shall be delivered to the Charterers at (state port or place).
(b) The Vessel on delivery shall be seaworthy and in every way fit to be employed for the intended service, having water ballast and with sufficient power to operate all cargo handling gear simultaneously, and, with full complement of Master, officers and ratings who meet the Standards for Training, Certification and Watchkeeping for Seafarers (STCW) requirements for a vessel of her tonnage.
(c) The Vessel’s holds shall be clean and in all respects ready to receive the intended cargo, or if no intended cargo, any permissible cargo:
(i) On *delivery; or
(ii) On *arrival at first loading port if different from place of delivery. If the Vessel fails hold inspection then the Vessel shall be off-hire from the time of rejection until the Vessel has passed a subsequent inspection.
*(c)(i) and (c)(ii) are alternatives; delete as appropriate. If no deletion then Sub-clause (c)(i) shall apply.
(d) The Owners shall keep the Charterers informed of the Vessel’s itinerary. Prior to the arrival of the Vessel at the delivery port or place, the Owners shall serve the Charterers with days’ approximate and days’ definite notices of the Vessel’s delivery. Following the tender of any such notice the Owners shall give or allow to be given to the Vessel only such further employment orders, if any, as are reasonably expected when given to allow delivery to occur on or before the date notified. The Owners shall give the Charterers and/or their local agents notice of delivery when the Vessel is in a position to come on hire.
Vessel itinerary prior to delivery: .
(e) Acceptance of delivery of the Vessel by the Charterers shall not prejudice their rights against the Owners under this Charter Party.
3. Laydays/Cancelling
If required by the Charterers, time on hire shall not commence before (local time) and should the Vessel not have been delivered on or before (local time) at the port or place stated in Sub-clause 2(a), the Charterers shall have the option of cancelling this Charter Party at any time but not later than the day of the Vessel’s notice of delivery.
NYPE 2015 TIME CHARTER
4. Redelivery
(a) The Vessel shall be redelivered to the Owners in like good order and condition, ordinary wear and tear excepted, at (state port or place)
(b) The Charterers shall keep the Owners informed of the Vessel’s itinerary. Prior to the arrival of the Vessel at the redelivery port or place, the Charterers shall serve the Owners with days’ approximate and days’ definite notices of the Vessel’s redelivery. Following the tender of any such notices the Charterers shall give or allow to be given to the Vessel only such further employment orders, if any, as are reasonably expected when given to allow redelivery to occur on or before the date notified.
(c) Acceptance of redelivery of the Vessel by the Owners shall not prejudice their rights against the Charterers under this Charter Party.
5. On/Off-Hire Survey
Prior to delivery and redelivery the parties shall, unless otherwise agreed, each appoint surveyors, for their respective accounts, who shall not later than at first loading port/last discharging port respectively, conduct joint on-hire/off-hire surveys, for the purpose of ascertaining the quantity of bunkers on board and the condition of the Vessel. A single report shall be prepared on each occasion and signed by each surveyor, without prejudice to his right to file a separate report setting forth items upon which the surveyors cannot agree.
If either party fails to have a representative attend the survey and sign the joint survey report, such party shall nevertheless be bound for all purposes by the findings in any report prepared by the other party.
Any time lost as a result of the on-hire survey shall be for the Owners’ account and any time lost as a result of the off-hire survey shall be for the Charterers’ account.
6. Owners to Provide
(a) The Owners shall provide and pay for the insurances of the Vessel, except as otherwise provided, and for all provisions, cabin, deck, engine-room and other necessary stores, boiler water and lubricating oil; shall pay for wages, consular shipping and discharging fees of the crew and charges for port services pertaining to the crew/crew visas; shall maintain the Vessel’s class and keep her in a thoroughly efficient state in hull, machinery and equipment for and during the service, and have a full complement of Master, officers and ratings.
(b) The Owners shall provide any documentation relating to the Vessel as required to permit the Vessel to trade within the agreed limits, including but not limited to International Tonnage Certificate, Suez and Panama tonnage certificates, Certificates of Registry, and certificates relating to the strength, safety and/or serviceability of the Vessel’s gear. Such documentation shall be maintained during the currency of the Charter Party as necessary.
Owners shall also provide and maintain such Certificates of Financial Responsibility for oil pollution to permit the Vessel to trade within the agreed limits as may be required at the commencement of the Charter Party. However, in the event that, at the time of renewal, a Certificate of Financial Responsibility is unavailable in the market place, or, the premium for same increases significantly over the course of the Charter Party, then Owners and Charterers shall discuss each with the other to find a mutually agreeable solution for same, failing such solution the port(s) that require said Certificate of Financial Responsibility are to be considered as added to the Vessel's trading exclusions. (See also Clause 18 (Pollution)).
(c) The Vessel to work night and day if required by the Charterers, with crew opening and closing hatches, when and where required and permitted by shore labor regulations, otherwise shore labor for same shall be for the Charterers’ account.
NYPE 2015 TIME CHARTER
7. Charterers to Provide
(a) The Charterers, while the Vessel is on-hire, shall provide and pay for all the bunkers except as otherwise agreed; shall pay for port charges (including compulsory garbage disposal), compulsory gangway watchmen and cargo watchmen, compulsory and/or customary pilotages, canal dues, towages, agencies, commissions, consular charges (except those pertaining to individual crew members or flag of the Vessel), and all other usual expenses except those stated in Clause 6, but when the Vessel puts into a port for causes for which the Vessel is responsible (other than by stress of weather), then all such charges incurred shall be paid by the Owners.
(b) Fumigations ordered because of illness of the crew or for infestations prior to delivery under this Charter Party shall be for the Owners’ account. Fumigations ordered because of cargoes carried or ports visited while the Vessel is employed under this Charter Party shall be for the Charterers’ account.
(c) The Charterers shall provide and pay for necessary dunnage, lashing materials and also any extra fittings requisite for a special trade or unusual cargo, but the Owners shall allow them the use of any dunnage already aboard the Vessel. Prior to redelivery the Charterers shall remove their dunnage, fittings and lashing materials at their cost and in their time.
8. Performance of Voyages
(a) Subject to Clause 38 (Slow Steaming) the Master shall perform the voyages with due despatch and shall render all customary assistance with the Vessel’s crew. The Master shall be conversant with the English language and (although appointed by the Owners) shall be under the orders and directions of the Charterers as regards employment and agency; and the Charterers shall perform all cargo handling, including but not limited to loading, stowing, trimming, lashing, securing, dunnaging, unlashing, discharging, and tallying, at their risk and expense, under the supervision of the Master.
(b) If the Charterers shall have reasonable cause to be dissatisfied with the conduct of the Master or officers, the Owners shall, on receiving particulars of the complaint, investigate the same, and, if necessary, make a change in appointments.
9. Bunkers
(a) Bunker quantities and prices
*(i) The Charterers on delivery, and the Owners on redelivery or any termination of this Charter Party, shall take over and pay for all bunkers remaining on board the Vessel as hereunder. The Vessel’s bunker tank capacities shall be at the Charterers’ disposal. Bunker quantities and prices on delivery /redelivery to be .
*(ii) The Owners shall provide sufficient bunkers onboard to perform the entire time charter trip. The Charterers shall not bunker the Vessel, and shall pay with the first hire payment for the mutually agreed estimated bunker consumption for the trip, namely metric tons at (price). Upon redelivery any difference between estimated and actual consumption shall be paid by the Charterers or refunded by the Owners as the case may be.
*(iii) The Charterers shall not take over and pay for bunkers Remaining On Board at delivery but shall redeliver the Vessel with about the same quantities and grades of bunkers as on delivery. Any difference between the delivery quantity and the redelivery quantity shall be paid by the Charterers or the Owners as the case may be. The price of the bunkers shall be the net contract price paid by the receiving party, as evidenced by suppliers’ invoice or other supporting documents.
*(i), (ii) and (iii) are alternatives; delete as applicable. If neither Sub-clause (i), (ii) nor (iii) is deleted then Sub- clause (i) shall apply.
NYPE 2015 TIME CHARTER
(b) Bunkering Prior to Delivery/Redelivery
Provided that it can be accomplished at ports of call, without hindrance to the working or operation of or delay to the Vessel, and subject to prior consent, which shall not be unreasonably withheld, the Owners shall allow the Charterers to bunker for their account prior to delivery and the Charterers shall allow the Owners to bunker for their account prior to redelivery. If consent is given, the party ordering the bunkering shall indemnify the other party for any delays, losses, costs and expenses arising therefrom.
(c) Bunkering Operations and Sampling
(i) The Chief Engineer shall co-operate with the Charterers’ bunkering agents and fuel suppliers during bunkering. Such cooperation shall include connecting/disconnecting hoses to the Vessel’s bunker manifold, attending sampling, reading gauges or meters or taking soundings, before, during and/or after delivery of fuels.
(ii) During bunkering a primary sample of each grade of fuels shall be drawn in accordance with the International Maritime Organization (IMO) Resolution Marine Environment Protection Committee (MEPC) MEPC.182(59) Guidelines for the Sampling of Fuel Oil for Determination of Compliance with the Marine Pollution Convention (MARPOL) 73/78 Annex VI or any subsequent amendments thereof. Each primary sample shall be divided into no fewer than five (5) samples; one sample of each grade of fuel shall be retained on board for MARPOL purposes and the remaining samples of each grade distributed between the Owners, the Charterers and the bunker suppliers.
(iii) The Charterers warrant that any bunker suppliers used by them to bunker the Vessel shall comply with the provisions of Sub-clause (c)(ii) above.
(iv) Bunkers of different grades, specifications and/or suppliers shall be segregated into separate tanks within the Vessel’s natural segregation. The Owners shall not be held liable for any restriction in bunker capacity as a result of segregating bunkers as aforementioned.
(d) Bunker Quality and Liability
(i) The Charterers shall supply bunkers of the agreed specifications and grades: The bunkers shall be of a stable and homogeneous nature and suitable for burning in the Vessel’s engines and/or auxiliaries and, unless otherwise agreed in writing, shall comply with the International Organization for Standardization (ISO) standard 8217:2012 or any subsequent amendments thereof. If ISO 8217:2012 is not available then the Charterers shall supply bunkers which comply with the latest ISO 8217 standard available at the port or place of bunkering.
(ii) The Charterers shall be liable for any loss or damage to the Owners or the Vessel caused by the supply of unsuitable fuels and/or fuels which do not comply with the specifications and/or grades set out in Sub-clause (d)(i) above, including the off-loading of unsuitable fuels and the supply of fresh fuels to the Vessel. The Owners shall not be held liable for any reduction in the Vessel’s speed performance and/or increased bunker consumption nor for any time lost and any other consequences arising as a result of such supply.
(e) Fuel Testing Program
Should the Owners participate in a recognized fuel testing program one of the samples retained by the Owners shall be forwarded for such testing. The cost of same shall be borne by the Owners and if the results of the testing show the fuel not to be in compliance with ISO 8217:2012, or any subsequent amendment thereof, or such other specification as may be agreed, the Owners shall notify the Charterers and provide a copy of the report as soon as reasonably possible.
In the event the Charterers call into question the results of the testing, a fuel sample drawn in accordance with IMO Resolution MEPC.96(47) Guidelines for the Sampling of Fuel Oil for Determination of Compliance
NYPE 2015 TIME CHARTER
with Annex VI of MARPOL 73/78 or any subsequent amendments thereof, shall be sent to a mutually agreed, qualified and independent laboratory whose analysis as regards the characteristics of the fuel shall be final and binding on the parties concerning the characteristics tested for. If the fuel sample is found not to be in compliance with the specification as agreed in the paragraph above, the Charterers shall meet the cost of this analysis, otherwise same shall be for the Owners’ account.
(f) Bunker Fuel Sulphur Content
(i) Without prejudice to anything else contained in this Charter Party, the Charterers shall supply fuels of such specifications and grades to permit the Vessel, at all times, to comply with the maximum sulphur content requirements of any emission control area when the Vessel is ordered to trade within that area.
The Charterers also warrant that any bunker suppliers, bunker craft operators and bunker surveyors used by the Charterers to supply such bunkers shall comply with Regulations 14 and 18 of MARPOL Annex VI, including the Guidelines in respect of sampling and the provision of bunker delivery notes.
The Charterers shall indemnify, defend and hold harmless the Owners in respect of any loss, liability, delay, fines, costs or expenses arising or resulting from the Charterers' failure to comply with this Sub-clause (f)(i).
(ii) Provided always that the Charterers have fulfilled their obligations in respect of the supply of fuels in accordance with Sub-clause (f)(i), the Owners warrant that:
1. the Vessel shall comply with Regulations 14 and 18 of MARPOL Annex VI and with the requirements of any emission control area; and
2. the Vessel shall be able to consume fuels of the required sulphur content,
when ordered by the Charterers to trade within any such area.
Subject to having supplied the Vessel with fuels in accordance with Sub-clause (f)(i), the Charterers shall not otherwise bear any loss, liability, delay, fines, costs or expenses arising or resulting from the Vessel’s failure to comply with Regulations 14 and 18 of MARPOL Annex VI.
(iii) For the purpose of this Clause, "emission control area" shall mean an area as stipulated in MARPOL Annex VI and/or an area regulated by regional and/or national authorities such as, but not limited to, the European Union (EU) and the United States (US) Environmental Protection Agency.
(g) Grades and Quantities of Bunkers on Redelivery
Unless agreed otherwise, the Vessel shall be redelivered with the same grades and about the same quantities of bunkers as on delivery; however, the grades and quantities of bunkers on redelivery shall always be appropriate and sufficient to allow the Vessel to reach safely the nearest port at which fuels of the required types are available.
10. Rate of Hire; Hold Cleaning; Communications; Victualing and Expenses
(a) The Charterers shall pay for the use and hire of the said Vessel at the rate of . per day or pro rata for any part of a day, commencing on and from the time of her delivery, as aforesaid, including the overtime of crew; hire to continue until the time of her redelivery to the Owners as per Clause 4 (Redelivery) (unless Vessel lost).
Unless otherwise mutually agreed, the Charterers shall have the option to redeliver the Vessel with unclean/unswept holds against a lumpsum payment of in lieu of hold cleaning, to the Owners (unless Vessel lost).
NYPE 2015 TIME CHARTER
The Owners shall victual pilots and such other persons as authorized by the Charterers or their agents. While on-hire, the Charterers shall pay the Owners along with the hire payments, per thirty (30) days or pro rata, to cover all Communications, Victualing and Expenses properly incurred by the Vessel under the Charterers’ employment.
For the purpose of hire calculations, the times of delivery, redelivery or termination of this Charter Party shall be adjusted to Coordinated Universal Time (UTC).
(b) Hold Cleaning/Residue Disposal
(i) The Charterers may request the Owners to direct the crew to sweep and/or wash and/or clean the holds between voyages and/or between cargoes against payment at the rate of per hold, provided the crew is able safely to undertake such work and is allowed to do so by local regulations. In connection with any such operation the Owners shall not be responsible if the Vessel's holds are not accepted or passed. Time for cleaning shall be for the Charterers’ account.
(ii) Unless this Charter Party is concluded for a single laden leg, all cleaning agents and additives (including chemicals and detergents) required for cleaning cargo holds shall be supplied and paid for by the Charterers. The Charterers shall provide the Owners with a dated and signed statement identifying cleaning agents and additives that, in accordance with IMO Resolution 219(63) Guidelines for the Implementation of MARPOL Annex V, are not substances harmful to the marine environment and do not contain any component known to be carcinogenic, mutagenic or reprotoxic.
(iii) Throughout the currency of this Charter Party and at redelivery, the Charterers shall remain responsible for all costs and time, including deviation, if any, associated with the removal and disposal of cargo related residues and/or hold washing water and/or cleaning agents and detergents and/or waste. Removal and disposal as aforesaid shall always be in accordance with and as defined by MARPOL Annex V, or other applicable rules.
11. Hire Payment
(a) Payment
Payment of Hire shall be made without deductions due to Charterers’ bank charges so as to be received by the Owners or their designated payee into the bank account as follows in the currency stated in Clause 10 (Rate of Hire; Hold Cleaning; Communications; Victualing and Expenses), in funds available to the Owners on the due date, fifteen (15) days in advance, and for the last fifteen (15) days or part of same the approximate amount of hire, and should the same not cover the actual time, hire shall be paid for the balance day by day as it becomes due, if so required by the Owners. The first payment of hire shall be due on delivery.
(b) Grace Period
Where there is failure to make punctual payment of hire due, the Charterers shall be given by the Owners three (3) Banking Days (as recognized at the agreed place of payment and the place of currency of the Charter Party) written notice to rectify the failure, and when so rectified within those three (3) Banking Days following the Owners’ notice, the payment shall stand as punctual.
(c) Withdrawal
Failure by the Charterers to pay hire due in full within three (3) Banking Days of their receiving a notice from Owners under Sub-clause 11(b) above shall entitle the Owners, without prejudice to any other rights or claims the Owners may have against the Charterers:
(i) to withdraw the Vessel from the service of the Charterers;
NYPE 2015 TIME CHARTER
(ii) to damages, if they withdraw the Vessel, for the loss of the remainder of the Charter Party.
(d) Suspension
At any time while hire is outstanding, the Owners shall, without prejudice to the liberty to withdraw, be entitled to withhold the performance of any and all obligations hereunder and shall have no responsibility whatsoever for any consequences thereof, and Charterers hereby indemnify the Owners for all legitimate and justifiable actions taken to secure their interests, and hire shall continue to accrue and any extra expenses resulting from such withholding shall be for the Charterers’ account.
(e) Last Hire Payment
Should the Vessel be on her voyage towards port/place of redelivery at the time the last payment(s) of hire is/are due, said payment(s) is/are to be made for such length of time as the estimated time necessary to complete the voyage, including the deduction of estimated disbursements for the Owners’ account before redelivery. Should said payments not cover the actual time, hire is to be paid for the balance, day by day, as it becomes due.
Unless Sub-clause 9(a)(ii) or (iii) has been agreed, the Charterers shall have the right to deduct the value of bunkers on redelivery from last sufficient hire payment(s).
When the Vessel has been redelivered, any difference in hire and bunkers is to be refunded by the Owners or paid by the Charterers within five (5) Banking Days, as the case may be.
(f) Cash Advances
Cash for the Vessel’s ordinary disbursements at any port may be advanced by the Charterers, as required by the Owners, subject to two and a half (2.5) per cent commission and such advances shall be deducted from the hire. The Charterers, however, shall in no way be responsible for the application of such advances.
12. Speed and Consumption
(a) Upon delivery and throughout the duration of this Charter Party the Vessel shall be capable of speed and daily consumption rates as stated in Appendix A in good weather on all sea passages with wind up to and including Force four (4) as per the Beaufort Scale and sea state up to and including Sea State three (3) as per the Douglas Sea Scale (unless otherwise specified in Appendix A). Any period during which the Vessel’s speed is deliberately reduced to comply with the Charterers’ orders/requirements (unless slow steaming or eco speed warranties have been given in Appendix A) or for reasons of safety or while navigating within narrow or restricted waters or when assisting a vessel in distress or when saving or attempting to save life or property at sea, shall be excluded from performance calculations.
(b) The Charterers shall have the option of using their preferred weather routing service. The Master shall comply with the reporting procedure of the Charterers’ weather routing service and shall follow routing recommendations from that service provided that the safety of the Vessel and/or cargo is not compromised.
(c) The actual route taken by the Vessel shall be used as the basis of any calculation of the Vessel's performance.
(d) If the speed of the Vessel is reduced and/or fuel oil consumption increased, the Charterers may submit to the Owners a documented claim limited to the estimated time lost and/or the additional fuel consumed, supported by a performance analysis from the weather routing service established in accordance with this Clause. The cost of any time lost shall be off-set against the cost of any fuel saved and vice versa.
(e) In the event that the Owners contest such claim then the Owners shall provide copies of the Vessel's deck logs for the period concerned and the matter shall be referred to an independent expert or alternative weather service selected by mutual agreement, whose report shall take Vessel’s log data and the Charterers’
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weather service data into consideration and whose determination shall be final and binding on the parties. The cost of such expert report shall be shared equally.
13. Spaces Available
(a) The whole reach of the Vessel’s holds, decks, and other cargo spaces (not more than she can reasonably and safely stow and carry), also accommodation for supercargo, if carried, shall be at the Charterers’ disposal, reserving only proper and sufficient space for the Vessel’s Master, officers, ratings, tackle, apparel, furniture, provisions, stores and bunkers.
(b) In the event of deck cargo being carried, the Owners are to be and are hereby indemnified by the Charterers for any loss and/or damage and/or liability of whatsoever nature howsoever caused to the deck cargo which would not have arisen had the deck cargo not been loaded. Bills of Lading shall be issued as per Clause 31(c).
14. Supercargo
The Charterers are entitled to appoint a supercargo, who shall accompany the Vessel at the Charterers’ risk and see that voyages are performed with due despatch. He is to be furnished with free accommodation and meals same as provided for the Master’s table. The Charterers and the supercargo are required to sign the standard letter of waiver and indemnity recommended by the Vessel’s Protection and Indemnity Association before the supercargo comes on board the Vessel.
15. Sailing Orders and Logs
The Charterers shall furnish the Master from time to time with all requisite instructions and sailing directions, in writing, in the English language, and the Master shall keep full and correct deck and engine logs of the voyage or voyages, which are to be patent to the Charterers or their agents, and shall furnish the Charterers, their agents or supercargo, when required, with a true copy of such deck and engine logs, showing the course of the Vessel, distance run and the consumption of bunkers. Any log extracts required by the Charterers shall be in the English language.
16. Cargo Exclusions
The Vessel shall be employed in carrying lawful merchandise, excluding any goods of a dangerous, injurious, flammable or corrosive nature unless carried in accordance with the requirements or recommendations of the competent authorities of the country of the Vessel’s registry, and of ports of loading and discharge, and of any intermediate countries or ports through whose waters the Vessel must pass. Without prejudice to the generality of the foregoing in addition the following are specifically excluded: livestock of any description, arms, ammunition, explosives, nuclear and radioactive material, .
17. Off-Hire
In the event of loss of time from deficiency and/or default and/or strike of officers or ratings, or deficiency of stores, fire, breakdown of, or damage to hull, machinery or equipment, grounding, detention by the arrest of the Vessel, (unless such arrest is caused by events for which the Charterers, their sub-charterers, servants, agents or sub-contractors are responsible), or detention by Port State control or other competent authority for Vessel deficiencies, or detention by average accidents to the Vessel or cargo, unless resulting from inherent vice, quality or defect of the cargo, drydocking for the purpose of examination, cleaning and/or painting of underwater parts and/or repair, or by any other similar cause preventing the full working of the Vessel, the payment of hire and overtime, if any, shall cease for the time thereby lost. Should the Vessel deviate or put back during a voyage, contrary to the orders or directions of the Charterers, for any reason other than accident to the cargo or where permitted in Clause 22 (Liberties) hereunder, the hire to be suspended from the time of her deviating or putting back until she is again in the same or equidistant position from the destination and the voyage resumed therefrom. All bunkers used by the Vessel while off-hire shall be for the Owners’ account. In the event of the Vessel being driven into port or to anchorage through stress
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of weather, trading to shallow harbors or to rivers or ports with bars, any detention of the Vessel and/or expenses resulting from such detention shall be for the Charterers’ account. If upon the voyage the speed be reduced by defect in, or breakdown of, any part of her hull, machinery or equipment, the time so lost, and the cost of any extra bunkers consumed in consequence thereof, and all extra proven expenses may be deducted from the hire. Bunkers used by the Vessel while off-hire and the cost of replacing same shall be for the Owners’ account and therefore deducted from the hire.
18. Pollution
The Owners shall provide for standard oil pollution coverage equal to the level customarily offered by the International Group of P&I Clubs, together with the appropriate certificates to that effect. (See also Clause 6 (Owners to Provide)).
19. Drydocking
The Vessel was last drydocked .
Except in case of emergency or under Clause 52(b), no drydocking shall take place during the currency of this Charter Party.
20. Total Loss
Should the Vessel be lost, money paid in advance and not earned (reckoning from the date of loss or being last heard of) shall be returned to the Charterers at once.
21. Exceptions
The act of God, enemies, fire, restraint of princes, rulers and people, and all dangers and accidents of the seas, rivers, machinery, boilers and navigation, and errors of navigation throughout this Charter Party, always mutually excepted.
22. Liberties
The Vessel shall have the liberty to sail with or without pilots, to tow and be towed, to assist vessels in distress, and to deviate for the purpose of saving life and property.
23. Liens
The Owners shall have a lien upon all cargoes, sub-hires and sub-freights (including deadfreight and demurrage) belonging or due to the Charterers or any sub-charterers, for any amounts due under this Charter Party, including general average contributions, and the Charterers shall have a lien on the Vessel for all monies paid in advance and not earned, and any overpaid hire or excess deposit to be returned at once.
The Charterers will not directly or indirectly suffer, nor permit to be continued, any lien or encumbrance, which might have priority over the title and interest of the Owners in the Vessel. The Charterers undertake that during the period of this Charter Party, they will not procure any supplies or necessaries or services, including any port expenses and bunkers, on the credit of the Owners.
24. Salvage
All derelicts and salvage shall be for the Owners’ and the Charterers’ equal benefit after deducting the Owners’ and the Charterers’ expenses and crew’s proportion.
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25. General Average
General average shall be adjusted according to York-Antwerp Rules 1994 and settled in US dollars in the same place as stipulated in Clause 54 (Law and Arbitration). The Charterers shall procure that all bills of lading issued during the currency of this Charter Party will contain a provision to the effect that general average shall be adjusted according to York-Antwerp Rules 1994 and will include the “New Jason Clause” as per Clause 33(c). Time charter hire will not contribute to general average.
26. Navigation
Nothing herein stated is to be construed as a demise of the Vessel to the Charterers. The Owners shall remain responsible for the navigation of the Vessel, acts of pilots and tug boats, insurance, crew, and all other matters, same as when trading for their own account.
27. Cargo Claims
Cargo claims as between the Owners and the Charterers shall be settled in accordance with the Inter-Club NYPE Agreement 1996 (as amended 1 September 2011), or any subsequent modification or replacement thereof.
28. Cargo Handling Gear and Lights
The Owners shall maintain the cargo handling gear of the Vessel providing lifting capacity as described in Appendix A (Vessel Description). The Owners shall also provide on the Vessel for night work lights as on board, but all additional lights over those on board shall be at the Charterers’ expense. The Charterers shall have the use of any cargo handling gear on board the Vessel. If required by the Charterers, the Vessel shall work night and day and all cargo handling gear shall be at the Charterers’ disposal during loading and discharging. In the event of disabled cargo handling gear, or insufficient power to operate the same, the Vessel is to be considered to be off-hire to the extent that time is actually lost to the Charterers and the Owners to pay stevedore stand-by charges occasioned thereby, unless such disablement or insufficiency of power is caused by the Charterers’ stevedores. If required by the Charterers, the Owners shall bear the cost of hiring shore gear in lieu thereof, in which case the Vessel shall remain on-hire, except for actual time lost.
29. Solid Bulk Cargoes/Dangerous Goods
(a) The Charterers shall provide appropriate information on the cargo in advance of loading in accordance with the requirements of the IMO International Maritime Solid Bulk Cargoes (IMSBC) Code to enable the precautions which may be necessary for proper stowage and safe carriage to be put into effect. The information shall be accompanied by a cargo declaration summarising the main details and stating that the cargo is fully and accurately described and that, where applicable, the test results and other specifications can be considered as representative for the cargo to be loaded.
(b) If a cargo listed in the IMO International Maritime Dangerous Goods (IMDG) Code (website: www.imo.org) is agreed to be carried, the Charterers shall provide a dangerous goods transport document and, where applicable, a container/vehicle packing certificate in accordance with the IMDG Code requirements. The dangerous goods transport document shall include a certificate or declaration that the goods are fully and accurately described by the Proper Shipping Name, are classified, packaged, marked and labelled/placarded correctly and are in all respects in proper condition for transport according to applicable international and national government regulations.
(c) The Master shall be entitled to refuse cargoes or, if already loaded, to unload them at the Charterers’ risk and expense if the Charterers fail to fulfil their IMSBC Code or IMDG Code obligations as applicable.
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30. BIMCO Hull Fouling Clause for Time Charter Parties
(a) If, in accordance with the Charterers’ orders, the Vessel remains at or shifts within a place, anchorage and/or berth for an aggregated period exceeding:
(i) a period as the parties may agree in writing in a Tropical Zone or Seasonal Tropical Zone*; or
(ii) a period as the parties may agree in writing outside such Zones*
any warranties concerning speed and consumption shall be suspended pending inspection of the Vessel’s underwater parts including, but not limited to, the hull, sea chests, rudder and propeller.
*If no such periods are agreed the default periods shall be 15 days.
(b) In accordance with Sub-clause (a), either party may call for inspection which shall be arranged jointly by the Owners and the Charterers and undertaken at the Charterers’ risk, cost, expense and time.
(c) If, as a result of the inspection either party calls for cleaning of any of the underwater parts, such cleaning shall be undertaken by the Charterers at their risk, cost, expense and time in consultation with the Owners.
(i) Cleaning shall always be under the supervision of the Master and, in respect of the underwater hull coating, in accordance with the paint manufacturers’ recommended guidelines on cleaning, if any. Such cleaning shall be carried out without damage to the Vessel’s underwater parts or coating.
(ii) If, at the port or place of inspection, cleaning as required under this Sub-clause (c) is not permitted or possible, or if the Charterers choose to postpone cleaning, speed and consumption warranties shall remain suspended until such cleaning has been completed.
(iii) If, despite the availability of suitable facilities and equipment, the Owners nevertheless refuse to permit cleaning, the speed and consumption warranties shall be reinstated from the time of such refusal.
(d) Cleaning in accordance with this Clause shall always be carried out prior to redelivery. If, nevertheless, the Charterers are prevented from carrying out such cleaning, the parties shall, prior to but latest on redelivery, agree a lump sum payment in full and final settlement of the Owners’ costs and expenses arising as a result of or in connection with the need for cleaning pursuant to this Clause.
(e) If the time limits set out in Sub-clause (a) have been exceeded but the Charterers thereafter demonstrate that the Vessel’s performance remains within the limits of this Charter Party the vessel’s speed and consumption warranties will be subsequently reinstated and the Charterers’ obligations in respect of inspection and/or cleaning shall no longer be applicable.
31. Bills of Lading (a) The Master shall sign bills of lading or waybills for cargo as presented in conformity with mates’ receipts.
However, the Charterers or their agents may sign bills of lading or waybills on behalf of the Master, with the Owners’/Master’s prior written authority, always in conformity with mates’ receipts.
(b) All bills of lading or waybills shall be without prejudice to this Charter Party and the Charterers shall indemnify the Owners against all consequences or liabilities which may arise from any inconsistency between this Charter Party and any bills of lading or waybills signed by the Charterers or their agents or by the Master at their request.
(c) Bills of lading covering deck cargo shall be claused: “Shipped on deck at the Charterers’, Shippers’ and Receivers’ risk, expense and responsibility, without liability on the part of the Vessel or her Owners for any loss, damage, expense or delay howsoever caused.”
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32. BIMCO Electronic Bills of Lading Clause
(a) At the Charterers’ option, bills of lading, waybills and delivery orders referred to in this Charter Party shall be issued, signed and transmitted in electronic form with the same effect as their paper equivalent.
(b) For the purpose of Sub-clause (a) the Owners shall subscribe to and use Electronic (Paperless) Trading Systems as directed by the Charterers, provided such systems are approved by the International Group of P&I Clubs. Any fees incurred in subscribing to or for using such systems shall be for the Charterers’ account.
(c) The Charterers agree to hold the Owners harmless in respect of any additional liability arising from the use of the systems referred to in Sub-clause (b), to the extent that such liability does not arise from Owners’ negligence.
33. Protective Clauses
The following protective clauses shall be deemed to form part of this Charter Party and all Bills of Lading or waybills issued under this Charter Party shall contain the following clauses.
(a) General Clause Paramount
This bill of lading shall have effect subject to the provisions of the Carriage of Goods by Sea Act of the United States, the Hague Rules, or the Hague Visby Rules, as applicable, or such other similar national legislation as may mandatorily apply by virtue of origin or destination of the bill of lading, (or if no such enactments are mandatorily applicable, the terms of the Hague Rules shall apply) which shall be deemed to be incorporated herein, and nothing herein contained shall be deemed a surrender by the carrier of any of its rights or immunities or an increase of any of its responsibilities or liabilities under said Act. If any term of this bill of lading be repugnant to said Act to any extent, such term shall be void to that extent, but no further.
And
(b) Both-to-Blame Collision Clause
“If the ship comes into collision with another ship as a result of the negligence of the other ship and any act, neglect or default of the master, mariner, pilot or the servants of the carrier in the navigation or in the management of the ship, the owners of the goods carried hereunder will indemnify the carrier against all loss or liability to the other or non-carrying ship or her owners insofar as such loss or liability represents loss of, or damage to, or any claim whatsoever of the owners of said goods, paid or payable by the other or non- carrying ship or her owners to the owners of said goods and set-off, recouped or recovered by the other or non-carrying ship or her owners as part of their claim against the carrying ship or carrier.
The foregoing provisions shall also apply where the owners, operators or those in charge of any ships or objects other than, or in addition to, the colliding ships or objects are at fault in respect to a collision or contact.”
And
(c) New Jason Clause
“In the event of accident, danger, damage or disaster before or after the commencement of the voyage, resulting from any cause whatsoever, whether due to negligence or not, for which, or for the consequences of which, the carrier is not responsible, by statute, contract, or otherwise, the goods, shippers, consignees, or owners of the goods shall contribute with the carrier in general average to the payment of any sacrifices, losses or expenses of a general average nature that may be made or incurred, and shall pay salvage and
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special charges incurred in respect of the goods. If a salving ship is owned or operated by the carrier, salvage shall be paid for as fully as if salving ship or ships belonged to strangers. Such deposit as the carrier or his agents may deem sufficient to cover the estimated contribution of the goods and any salvage and special charges thereon shall, if required, be made by the goods, shippers, consignees or owners of the goods to the Carrier before delivery.”
34. BIMCO War Risks Clause CONWARTIME 2013
(a) For the purpose of this Clause, the words:
(i) “Owners” shall include the shipowners, bareboat charterers, disponent owners, managers or other operators who are charged with the management of the Vessel, and the Master; and
(ii) “War Risks” shall include any actual, threatened or reported:
war, act of war, civil war or hostilities; revolution; rebellion; civil commotion; warlike operations; laying of mines; acts of piracy and/or violent robbery and/or capture/seizure (hereinafter “Piracy”); acts of terrorists; acts of hostility or malicious damage; blockades (whether imposed against all vessels or imposed selectively against vessels of certain flags or ownership, or against certain cargoes or crews or otherwise howsoever), by any person, body, terrorist or political group, or the government of any state or territory whether recognized or not, which, in the reasonable judgement of the Master and/or the Owners, may be dangerous or may become dangerous to the Vessel, cargo, crew or other persons on board the Vessel.
(b) The Vessel shall not be obliged to proceed or required to continue to or through, any port, place, area or zone, or any waterway or canal (hereinafter “Area”), where it appears that the Vessel, cargo, crew or other persons on board the Vessel, in the reasonable judgement of the Master and/or the Owners, may be exposed to War Risks whether such risk existed at the time of entering into this Charter Party or occurred thereafter. Should the Vessel be within any such place as aforesaid, which only becomes dangerous, or may become dangerous, after entry into it, the Vessel shall be at liberty to leave it.
(c) The Vessel shall not be required to load contraband cargo, or to pass through any blockade as set out in Sub- clause (a), or to proceed to an Area where it may be subject to search and/or confiscation by a belligerent.
(d) If the Vessel proceeds to or through an Area exposed to War Risks, the Charterers shall reimburse to the Owners any additional premiums required by the Owners' insurers and the costs of any additional insurances that the Owners reasonably require in connection with War Risks.
(e) All payments arising under Sub-clause (d) shall be settled within fifteen (15) days of receipt of Owners’ supported invoices or on redelivery, whichever occurs first.
(f) If the Owners become liable under the terms of employment to pay to the crew any bonus or additional wages in respect of sailing into an Area which is dangerous in the manner defined by the said terms, then the actual bonus or additional wages paid shall be reimbursed to the Owners by the Charterers at the same time as the next payment of hire is due, or upon redelivery, whichever occurs first.
(g) The Vessel shall have liberty:
(i) to comply with all orders, directions, recommendations or advice as to departure, arrival, routes, sailing in convoy, ports of call, stoppages, destinations, discharge of cargo, delivery, or in any other way whatsoever, which are given by the government of the nation under whose flag the Vessel sails, or other government to whose laws the Owners are subject, or any other government of any state or territory whether recognized or not, body or group whatsoever acting with the power to compel compliance with their orders or directions;
(ii) to comply with the requirements of the Owners’ insurers under the terms of the Vessel’s insurance(s);
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(iii) to comply with the terms of any resolution of the Security Council of the United Nations, the effective orders of any other Supranational body which has the right to issue and give the same, and with national laws aimed at enforcing the same to which the Owners are subject, and to obey the orders and directions of those who are charged with their enforcement;
(iv) to discharge at any alternative port any cargo or part thereof which may expose the Vessel to being held liable as a contraband carrier;
(v) to call at any alternative port to change the crew or any part thereof or other persons on board the Vessel when there is reason to believe that they may be subject to internment, imprisonment, detention or similar measures.
(h) If in accordance with their rights under the foregoing provisions of this Clause, the Owners shall refuse to proceed to the loading or discharging ports, or any one or more of them, they shall immediately inform the Charterers. No cargo shall be discharged at any alternative port without first giving the Charterers notice of the Owners’ intention to do so and requesting them to nominate a safe port for such discharge. Failing such nomination by the Charterers within forty-eight (48) hours of the receipt of such notice and request, the Owners may discharge the cargo at any safe port of their own choice. All costs, risk and expenses for the alternative discharge shall be for the Charterers’ account.
(i) The Charterers shall indemnify the Owners for claims arising out of the Vessel proceeding in accordance with any of the provisions of Sub-clauses (b) to (h) which are made under any bills of lading, waybills or other documents evidencing contracts of carriage.
(j) When acting in accordance with any of the provisions of Sub-clauses (b) to (h) of this Clause anything is done or not done, such shall not be deemed a deviation, but shall be considered as due fulfilment of this Charter Party.
35. Ice
The Vessel shall not be obliged to force ice but, subject to the Owners’ prior approval having due regard to its size, construction and class, may follow ice-breakers. The Vessel shall not be required to enter or remain in any icebound port or area, nor any port or area where lights or lightships have been or are about to be withdrawn by reason of ice, nor where there is risk that in the ordinary course of things the Vessel will not be able on account of ice to safely enter and remain in the port or area or to get out after having completed loading or discharging.
36. Requisition
Should the Vessel be requisitioned by the government of the Vessel’s flag or other government to whose laws the Owners are subject during the period of this Charter Party, the Vessel shall be deemed to be off-hire during the period of such requisition, and any hire paid by the said government in respect of such requisition period shall be retained by Owners. The period during which the Vessel is on requisition to the said government shall count as part of the period provided for in this Charter Party.
If the period of requisition exceeds ninety (90) days, either party shall have the option of cancelling this Charter Party and no consequential claim in respect thereof may be made by either party.
37. Stevedore Damage
Notwithstanding anything contained herein to the contrary, the Charterers shall pay for any and all damage to the Vessel caused by stevedores provided the Master has notified the Charterers and/or their agents in writing within twenty-four (24) hours of the occurrence but in case of hidden damage latest when the damage
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could have been discovered by the exercise of due diligence. Such notice to describe the damage and to invite Charterers to appoint a surveyor to assess the extent of such damage.
(a) In case of any and all damage affecting the Vessel’s seaworthiness and/or the safety of the crew and/or affecting the trading capabilities of the Vessel, the Charterers shall immediately arrange for repairs of such damage at their expense and the Vessel is to remain on-hire until such repairs are completed and if required passed by the Vessel’s classification society.
(b) Any and all damage not described under Sub-clause (a) above shall be repaired, at the Charterers’ option, before or after redelivery concurrently with the Owners’ work. In such case no hire and/or expenses will be paid to the Owners except and insofar as the time and/or expenses required for the repairs for which the Charterers are responsible, exceed the time and/or expenses necessary to carry out the Owners’ work.
38. Slow Steaming
(a) The Charterers may at their discretion provide, in writing to the Master, instructions to reduce speed or Revolutions Per Minute (main engine RPM) and/or instructions to adjust the Vessel’s speed to meet a specified time of arrival at a particular destination.
(i) * Slow Steaming – Where the Charterers give instructions to the Master to adjust the speed or RPM, the Master shall, subject always to the Master’s obligations in respect of the safety of the Vessel, crew and cargo and the protection of the marine environment, comply with such written instructions, provided that the engine(s) continue(s) to operate above the cut-out point of the Vessel's engine(s) auxiliary blower(s) and that such instructions will not result in the Vessel’s engine(s) and/or equipment operating outside the manufacturers’/designers’ recommendations as published from time to time.
(ii) * Ultra-Slow Steaming – Where the Charterers give instructions to the Master to adjust the speed or RPM, regardless of whether this results in the engine(s) operating above or below the cut-out point of the Vessel's engine(s) auxiliary blower(s), the Master shall, subject always to the Master’s obligations in respect of the safety of the Vessel, crew and cargo and the protection of the marine environment, comply with such written instructions, provided that such instructions will not result in the Vessel’s engine(s) and/or equipment operating outside the manufacturers’/designers’ recommendations as published from time to time. If the manufacturers’/designers’ recommendations issued subsequent to the date of this Charter Party require additional physical modifications to the engine or related equipment or require the purchase of additional spares or equipment, the Master shall not be obliged to comply with these instructions.
*Sub-clauses (a)(i) and (a)(ii) are alternatives; delete whichever is not applicable. In the absence of deletions, alternative (a)(i) shall apply.
(b) At all speeds the Owners shall exercise due diligence to ensure that the Vessel is operated in a manner which minimises fuel consumption, always taking into account and subject to the following:
(i) the Owners’ warranties under this Charter Party relating to the Vessel’s speed and consumption;
(ii) the Charterers’ instructions as to the Vessel’s speed and/or RPM and/or specified time of arrival at a particular destination;
(iii) the safety of the Vessel, crew and cargo and the protection of the marine environment; and
(iv) the Owners’ obligations under any bills of lading, waybills or other documents evidencing contracts of carriage issued by them or on their behalf.
(c) For the purposes of Sub-clause (b), the Owners shall exercise due diligence to minimise fuel consumption:
(i) when planning voyages, adjusting the Vessel’s trim and operating main engine(s) and auxiliary engine(s);
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(ii) by making optimal use of the Vessel’s navigation equipment and any additional aids provided by the Charterers, such as weather routing, voyage optimization and performance monitoring systems; and
(iii) by directing the Master to report any data that the Charterers may reasonably request to further improve the energy efficiency of the Vessel.
(d) The Owners and the Charterers shall share any findings and best practices that they may have identified on potential improvements to the Vessel’s energy efficiency.
(e) For the avoidance of doubt, where the Vessel proceeds at a reduced speed or with reduced RPM pursuant to Sub-clause (a), then provided that the Master has exercised due diligence to comply with such instructions, this shall constitute compliance with, and there shall be no breach of, any obligation requiring the Vessel to proceed with utmost and/or due despatch (or any other such similar/equivalent expression).
(f) The Charterers shall procure that this Clause be incorporated into all sub-charters and contracts of carriage issued pursuant to this Charter Party. The Charterers shall indemnify the Owners against all consequences and liabilities that may arise from bills of lading, waybills or other documents evidencing contracts of carriage being issued as presented to the extent that the terms of such bills of lading, waybills or other documents evidencing contracts of carriage impose or result in breach of the Owners’ obligation to proceed with due despatch or are to be held to be a deviation or the imposition of more onerous liabilities upon the Owners than those assumed by the Owners pursuant to this Clause.
39. BIMCO Piracy Clause for Time Charter Parties 2013
(a) The Vessel shall not be obliged to proceed or required to continue to or through, any port, place, area or zone, or any waterway or canal (hereinafter “Area”) which, in the reasonable judgement of the Master and/or the Owners, is dangerous to the Vessel, her cargo, crew or other persons on board the Vessel due to any actual, threatened or reported acts of piracy and/or violent robbery and/or capture/seizure (hereinafter “Piracy”), whether such risk existed at the time of entering into this Charter Party or occurred thereafter. Should the Vessel be within any such place as aforesaid which only becomes dangerous, or may become dangerous, after her entry into it, she shall be at liberty to leave it.
(b) If in accordance with Sub-clause (a) the Owners decide that the Vessel shall not proceed or continue to or through the Area they must immediately inform the Charterers. The Charterers shall be obliged to issue alternative voyage orders and shall indemnify the Owners for any claims from holders of the Bills of Lading caused by waiting for such orders and/or the performance of an alternative voyage. Any time lost as a result of complying with such orders shall not be considered off-hire.
(c) If the Owners consent or if the Vessel proceeds to or through an Area exposed to the risk of Piracy the Owners shall have the liberty:
(i) to take reasonable preventative measures to protect the Vessel, crew and cargo including but not limited to re-routeing within the Area, proceeding in convoy, using escorts, avoiding day or night navigation, adjusting speed or course, or engaging security personnel and/or deploying equipment on or about the Vessel (including embarkation/disembarkation);
(ii) to comply with underwriters’ requirements under the terms of the Vessel’s insurance(s);
(iii) to comply with all orders, directions, recommendations or advice given by the Government of the Nation under whose flag the Vessel sails, or other Government to whose laws the Owners are subject, or any other Government, body or group (including military authorities) whatsoever acting with the power to compel compliance with their orders or directions; and
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(iv) to comply with the terms of any resolution of the Security Council of the United Nations, the effective orders of any other Supranational body which has the right to issue and give the same, and with national laws aimed at enforcing the same to which the Owners are subject, and to obey the orders and directions of those who are charged with their enforcement;
and the Charterers shall indemnify the Owners for any claims from holders of Bills of Lading or third parties caused by the Vessel proceeding as aforesaid, save to the extent that such claims are covered by additional insurance as provided in Sub-clause (d)(iii).
(d) Costs
(i) if the Vessel proceeds to or through an Area where due to risk of Piracy additional costs will be incurred including but not limited to additional personnel and preventative measures to avoid Piracy, such reasonable costs shall be for the Charterers’ account. Any time lost waiting for convoys, following recommended routeing, timing, or reducing speed or taking measures to minimise risk, shall be for the Charterers’ account and the Vessel shall remain on hire;
(ii) if the Owners become liable under the terms of employment to pay to the crew any bonus or additional wages in respect of sailing into an area which is dangerous in the manner defined by the said terms, then the actual bonus or additional wages paid shall be reimbursed to the Owners by the Charterers;
(iii) if the Vessel proceeds to or through an Area exposed to the risk of Piracy, the Charterers shall reimburse to the Owners any additional premiums required by the Owners' insurers and the costs of any additional insurances that the Owners reasonably require in connection with Piracy risks which may include but not be limited to War Loss of Hire and/or maritime Kidnap and Ransom (K&R); and
(iv) all payments arising under Sub-clause (d) shall be settled within fifteen (15) days of receipt of the Owners’ supported invoices or on redelivery, whichever occurs first.
(e) If the Vessel is attacked by pirates any time lost shall be for the account of the Charterers and the Vessel shall remain on hire.
(f) If the Vessel is seized by pirates the Owners shall keep the Charterers closely informed of the efforts made to have the Vessel released. The Vessel shall remain on hire throughout the seizure and the Charterers’ obligations shall remain unaffected, except that hire payments shall cease as of the ninety-first (91st) day after the seizure until release. The Charterers shall pay hire, or if the Vessel has been redelivered, the equivalent of Charter Party hire, for any time lost in making good any damage and deterioration resulting from the seizure. The Charterers shall not be liable for late redelivery under this Charter Party resulting from the seizure of the Vessel.
(g) If in compliance with this Clause anything is done or not done, such shall not be deemed a deviation, but shall be considered as due fulfilment of this Charter Party. In the event of a conflict between the provisions of this Clause and any implied or express provision of the Charter Party, this Clause shall prevail.
40. Taxes
Charterers are to pay all local, State, National taxes and/or dues assessed on the Vessel or the Owners resulting from the Charterers’ orders herein, whether assessed during or after the currency of this Charter Party including any taxes and/or dues on cargo and/or freights and/or sub-freights and/or hire (excluding taxes levied by the country of the flag of the Vessel or the Owners). In the event the Owners/Vessel/her flag state are exempt from any taxes, the Owners shall seek such exemption and filing costs for such exemption, if any, shall be for the Charterers’ account and no charge for such taxes shall be assessed to the Charterers.
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41. Industrial Action
In the event of the Vessel being delayed or rendered inoperative by strikes, labor stoppages or boycotts or any other difficulties arising from the Vessel’s ownership, crew or terms of employment of the crew of the chartered Vessel or any other vessel under the same ownership, operation and control, any time lost is to be considered off-hire. The Owners guarantee that on delivery the minimum terms and conditions of employment of the crew of the Vessel are in accordance with the International Labour Organization Maritime Labour Convention (MLC) 2006, and will remain so throughout the duration of this Charter Party.
42. Stowaways
(a) If stowaways have gained access to the Vessel by means of secreting away in the goods and/or containers or by any other means related to the cargo operation, this shall amount to breach of this Charter Party. The Charterers shall be liable for the consequences of such breach and hold the Owners harmless and keep them indemnified against all claims; costs (including but not limited to victualing costs for stowaways whilst on board and repatriation); losses; and fines or penalties, which may arise and be made against them. The Charterers shall, if required, place the Owners in funds to put up bail or other security. The Vessel shall remain on hire for any time lost as a result of such breach.
(b) Save for those stowaways referred to in Sub-clause (a), if stowaways have gained access to the Vessel this shall amount to a breach of this Charter Party. The Owners shall be liable for the consequences of such breach and hold the Charterers harmless and keep them indemnified against all claims; costs; losses; and fines or penalties, which may arise and be made against them. The Vessel shall be off-hire for any time lost as a result of such breach.
43. Smuggling
(a) In the event of smuggling by the Master, other Officers and/or ratings, this shall amount to a breach of this Charter Party. The Owners shall be liable for the consequences of such breach and hold the Charterers harmless and keep them indemnified against all claims, costs, losses, and fines and penalties which may arise and be made against them. The Vessel shall be off-hire for any time lost as a result of such breach.
(b) If unmanifested narcotic drugs and/or any other illegal substances are found secreted in the goods and/or containers or by any other means related to the cargo operation, this shall amount to a breach of this Charter Party. The Charterers shall be liable for the consequences of such breach and hold the Owners, Master, officers and ratings of the Vessel harmless and keep them indemnified against all claims, costs, losses, and fines and penalties which may arise and be made against them individually or jointly. The Charterers shall, if required, place the Owners in funds to put up bail or other security. The Vessel shall remain on hire for any time lost as a result of such breach.
44. International Safety Management (ISM)
During the duration of this Charter Party, the Owners shall procure that both the Vessel and “the Company” (as defined by the ISM Code) shall comply with the requirements of the ISM Code. Upon request the Owners shall provide a copy of the relevant Document of Compliance (DOC) and Safety Management Certificate (SMC) to the Charterers. Except as otherwise provided in this Charter Party, loss, damage, expense or delay caused by failure on the part of the Owners or “the Company” to comply with the ISM Code shall be for the Owners’ account.
45. International Ship and Port Facility Security Code (ISPS Code)/Maritime Transportation Security Act (MTSA)
(a) (i) The Owners shall comply with the requirements of the ISPS and the relevant amendments to Chapter XI of
Safety of Life at Sea (SOLAS) (ISPS Code) relating to the Vessel and “the Company” (as defined by the ISPS
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Code). If trading to or from the US or passing through US waters, the Owners shall also comply with the requirements of the MTSA relating to the Vessel and the “Owner” (as defined by the MTSA).
(ii) Upon request the Owners shall provide the Charterers with a copy of the relevant International Ship Security Certificate (ISSC) (or the interim ISSC) and the full style contact details of the Company Security Officer (CSO).
(iii) Loss, damages, expense or delay (excluding consequential loss, damages, expense or delay) caused by failure on the part of the Owners or “the Company”/“Owner” to comply with the requirements of the ISPS Code/MTSA or this Clause shall be for the Owners’ account, except as otherwise provided in this Charter Party.
(b) (i) The Charterers shall provide the Owners and the Master with their full style contact details and, upon request, any other information the Owners require to comply with the ISPS Code/MTSA. Where sub-letting is permitted under the terms of this Charter Party, the Charterers shall ensure that the contact details of all sub-charterers are likewise provided to the Owners and the Master. Furthermore, the Charterers shall ensure that all sub-charter parties they enter into during the period of this Charter Party contain the following provision:
“The Charterers shall provide the Owners with their full style contact details and, where sub-letting is permitted under the terms of the charter party, shall ensure that contact details of all sub-charterers are likewise provided to the Owners”.
(ii) Loss, damages, expense or delay (excluding consequential loss, damages, expense or delay) caused by failure on the part of the Charterers to comply with this Clause shall be for the Charterers’ account, except as otherwise provided in this Charter Party.
(c) Notwithstanding anything else contained in this Charter Party all delay, costs or expenses whatsoever arising out of or related to security regulations or measures required by the port facility or any relevant authority in accordance with the ISPS Code/MTSA including, but not limited to, security guards, launch services, vessel escorts, security fees or taxes and inspections, shall be for the Charterers’ account, unless such costs or expenses result solely from the negligence of the Owners, Master or crew or the previous trading of the Vessel, the nationality of the crew, crew visas, the Vessel’s flag or the identity of the Owners’ managers. All measures required by the Owners to comply with the Ship Security Plan shall be for the Owners’ account.
(d) If either party makes any payment which is for the other party’s account according to this Clause, the other party shall indemnify the paying party.
46. Sanctions
(a) The Owners shall not be obliged to comply with any orders for the employment of the Vessel in any carriage, trade or on a voyage which, in the reasonable judgement of the Owners, will expose the Vessel, Owners, managers, crew, the Vessel’s insurers, or their re-insurers, to any sanction or prohibition imposed by any State, Supranational or International Governmental Organization.
(b) If the Vessel is already performing an employment to which such sanction or prohibition is subsequently applied, the Owners shall have the right to refuse to proceed with the employment and the Charterers shall be obliged to issue alternative voyage orders within forty-eight (48) hours of receipt of the Owners’ notification of their refusal to proceed. If the Charterers do not issue such alternative voyage orders the Owners may discharge any cargo already loaded at any safe port (including the port of loading). The Vessel to remain on hire pending completion of the Charterers’ alternative voyage orders or delivery of cargo by the Owners and the Charterers to remain responsible for all additional costs and expenses incurred in connection with such orders/delivery of cargo. If in compliance with this Sub-clause (b) anything is done or not done, such shall not be deemed a deviation.
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(c) The Charterers shall indemnify the Owners against any and all claims whatsoever brought by the owners of the cargo and/or the holders of Bills of Lading and/or sub-charterers against the Owners by reason of the Owners’ compliance with such alternative voyage orders or delivery of the cargo in accordance with Sub- clause (b).
(d) The Charterers shall procure that this Clause shall be incorporated into all sub-charters issued pursuant to this Charter Party.
47. BIMCO Designated Entities Clause for Charter Parties
(a) The provisions of this clause shall apply in relation to any sanction, prohibition or restriction imposed on any specified persons, entities or bodies including the designation of specified vessels or fleets under United Nations Resolutions or trade or economic sanctions, laws or regulations of the European Union or the United States of America.
(b) The Owners and the Charterers respectively warrant for themselves (and in the case of any sublet, the Charterers further warrant in respect of any sub-charterers, shippers, receivers, or cargo interests) that at the date of this fixture and throughout the duration of this Charter Party they are not subject to any of the sanctions, prohibitions, restrictions or designation referred to in Sub-clause (a) which prohibit or render unlawful any performance under this Charter Party or any sublet or any Bills of Lading. The Owners further warrant that the nominated vessel, or any substitute, is not a designated vessel.
(c) If at any time during the performance of this Charter Party either party becomes aware that the other party is in breach of warranty as aforesaid, the party not in breach shall comply with the laws and regulations of any Government to which that party or the Vessel is subject, and follow any orders or directions which may be given by any body acting with powers to compel compliance, including where applicable the Owners’ flag State. In the absence of any such orders, directions, laws or regulations, the party not in breach may, in its option, terminate the Charter Party forthwith or, if cargo is on board, direct the Vessel to any safe port of that party’s choice and there discharge the cargo or part thereof.
(d) If, in compliance with the provisions of this Clause, anything is done or is not done, such shall not be deemed a deviation but shall be considered due fulfilment of this Charter Party.
(e) Notwithstanding anything in this Clause to the contrary, the Owners or the Charterers shall not be required to do anything which constitutes a violation of the laws and regulations of any State to which either of them is subject.
(f) The Owners or the Charterers shall be liable to indemnify the other party against any and all claims, losses, damage, costs and fines whatsoever suffered by the other party resulting from any breach of warranty as aforesaid.
(g) The Charterers shall procure that this Clause is incorporated into all sub-charters, contracts of carriage and Bills of Lading issued pursuant to this Charter Party.
48. BIMCO North American Advance Cargo Notification Clause for Time Charter Parties
(a) If the Vessel loads or carries cargo destined for the US or Canada or passing through US or Canadian ports in transit, the Charterers shall comply with the current US Customs regulations (19 CFR 4.7) or the Canada Border Services Agency regulations (Memorandum D3-5-2) or any subsequent amendments thereto and shall undertake the role of carrier for the purposes of such regulations and shall, in their own name, time and expense:
(i) have in place a Standard Carrier Alpha Code (SCAC)/Canadian Customs Carrier Code;
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(ii) for US trade, have in place an International Carrier Bond (ICB);
(iii) provide the Owners with a timely confirmation of (i) and (ii) above as appropriate; and
(iv) submit a cargo declaration by Automated Manifest System (AMS) to the US Customs or by ACI Automated Commercial Information (ACI) to the Canadian customs, and provide the Owners at the same time with a copy thereof.
(b) The Charterers assume liability for and shall indemnify, defend and hold harmless the Owners against any loss and/or damage whatsoever (including consequential loss and/or damage) and/or any expenses, fines, penalties and all other claims of whatsoever nature, including but not limited to legal costs, arising from the Charterers’ failure to comply with any of the provisions of Sub-clause (a). Should such failure result in any delay then, notwithstanding any provision in this Charter Party to the contrary, the Vessel shall remain on hire.
(c) If the Charterers' ICB is used to meet any penalties, duties, taxes or other charges which are solely the responsibility of the Owners, the Owners shall promptly reimburse the Charterers for those amounts.
(d) The assumption of the role of carrier by the Charterers pursuant to this Clause and for the purpose of the US Customs Regulations (19 CFR 4.7) shall be without prejudice to the identity of carrier under any bill of lading, other contract, law or regulation.
49. BIMCO U.S. Census Bureau Mandatory Automated Export System (AES) Clause for Time Charter Parties
(a) If the Vessel loads cargo in any US port or place, the Charterers shall comply with the current US Census Bureau Regulations (15 CFR 30) or any subsequent amendments thereto and shall undertake the role of carrier for the purposes of such regulations and shall, in their own name, time and expense:
(i) have in place a SCAC (Standard Carrier Alpha Code);
(ii) have in place an ICB (International Carrier Bond);
(iii) provide the Owners with a timely confirmation of (i) and (ii) above; and
(iv) submit an export ocean manifest by Automated Export System (AES) to the US Census Bureau and provide the Owners at the same time with a copy thereof.
(b) The Charterers assume liability for and shall indemnify, defend and hold harmless the Owners against any loss and/or damage whatsoever (including consequential loss and/or damage) and/or any expenses, fines, penalties and all other claims of whatsoever nature, including but not limited to legal costs, arising from the Charterers’ failure to comply with any of the provisions of Sub-clause (a). Should such failure result in any delay then, notwithstanding any provision in this Charter Party to the contrary, the Vessel shall remain on hire.
(c) If the Charterers' ICB is used to meet any penalties, duties, taxes or other charges which are solely the responsibility of the Owners, the Owners shall promptly reimburse the Charterers for those amounts.
(d) The assumption of the role of carrier by the Charterers pursuant to this Clause and for the purpose of the US Census Bureau Regulations (15 CFR 30) shall be without prejudice to the identity of carrier under any bill of lading, other contract, law or regulation.
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50. BIMCO EU Advance Cargo Declaration Clause for Time Charter Parties 2012
(a) If the Vessel loads cargo in any EU port or place destined for a port or place outside the EU (“Exported”) or loads cargo outside the EU destined for an EU port or place or passing through EU ports or places in transit (“Imported”), the Charterers shall, for the purposes of this Clause, comply with the requirements of the EU Advance Cargo Declaration Regulations (the Security Amendment to the Community Customs Code, Regulations 648/2005; 1875/2006; and 312/2009) or any subsequent amendments thereto and shall, in their own name, and in their time and at their expense:
(i) have in place an Economic Operator Registration and Identification (EORI) number;
(ii) provide the Owners with a timely confirmation of (i) above as appropriate; and
(iii) where the cargo is being:
1. Exported: Submit, or arrange for the submission of, a customs declaration for export or, if a customs declaration or a re-export notification is not required, an exit summary declaration; or
2. Imported: Submit, or arrange for the submission of, an entry summary declaration.
Unless otherwise permitted by the relevant customs authorities, such declarations shall be submitted to them electronically.
(b) The Charterers assume liability for and shall indemnify, defend and hold harmless the Owners against any loss and/or damage and/or any expenses, fines, penalties and all other claims of whatsoever nature, including but not limited to legal costs, arising from the Charterers’ failure to comply with any of the provisions of Sub- clause (a). Should such failure result in any delay then, notwithstanding any provision in this Charter Party to the contrary, the Vessel shall remain on hire.
51. Ballast Water Exchange Regulations If ballast water exchanges are required by any coastal state where the vessel is trading, the Owners/Master shall comply with same at the Charterers’ time, risk, and expense.
52. Period Applicable Clauses
If the minimum period of this Charter Party exceeds five (5) months, the following Sub-clauses shall apply:
(a) Should the Vessel at the expiry of the described employment period be on a ballast voyage to the place of redelivery or on a laden voyage, reasonably expected to be completed within the employment period when commenced, the Charterers shall have the use of the Vessel on the same conditions and at the same rate or the prevailing market rate, whichever is higher, for any extended time as may be necessary for the completion of the last voyage of the Vessel to the place of redelivery.
(b) Drydocking
The Owners shall have the option to place the Vessel in drydock during the currency of this Charter Party at a convenient time and place, to be mutually agreed upon between the Owners and the Charterers, for bottom cleaning and painting and/or repair as required by class or dictated by circumstances. (See also Clause 19 (Drydocking)).
(c) Off-hire
The Charterers to have the option of adding any time the Vessel is off-hire to the Charter period. Such option shall be declared in writing not less than one (1) month before the expected date of redelivery, or latest one (1) week after the event if such event occurs less than one (1) month before the expected date of redelivery.
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(d) Charterers’ Colors
The Charterers shall have the privilege of flying their own house flag and painting the Vessel with their own markings. The Vessel shall be repainted in the Owners’ colors before termination of the Charter Party. Cost and time of painting, maintaining and repainting those changes effected by the Charterers shall be for the Charterers’ account.
53. Commissions
A commission of per cent is payable by the Vessel and the Owners to on hire earned and paid under this Charter Party, and also upon any continuation or extension of this Charter Party.
An address commission of per cent on the hire earned shall be deducted by the Charterers on payment of the hire earned under this Charter Party.
54. Law and Arbitration
(a) * New York. This Charter Party shall be governed by United States maritime law. Any dispute arising out of or in connection with this Charter Party shall be referred to three persons at New York, one to be appointed by each of the parties hereto, and the third by the two so chosen. The award of the arbitrators or any two of them shall be final, and for the purposes of enforcing any award, judgment may be entered on an award by any court of competent jurisdiction. The proceedings shall be conducted in accordance with the rules of the Society of Maritime Arbitrators, Inc. (SMA) current at the time this Charter Party was entered into.
In cases where neither the claim nor any counter claim exceeds the sum of US$ 100,000 (or such other sum as the parties may agree), the arbitration shall be conducted before a sole arbitrator in accordance with the Shortened Arbitration Procedure of the SMA current at the time this Charter Party was entered into. (www.smany.org).
(b) * London. This Charter Party shall be governed by and construed in accordance with English law and any dispute arising out of or in connection with this Charter Party shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof save to the extent necessary to give effect to the provisions of this Clause.
The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA) Terms current at the time when the arbitration proceedings are commenced.
The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other party requiring the other party to appoint its own arbitrator within fourteen (14) calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other party appoints its own arbitrator and gives notice that it has done so within the fourteen (14) days specified. If the other party does not appoint its own arbitrator and give notice that it has done so within the fourteen (14) days specified, the party referring a dispute to arbitration may, without the requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall advise the other party accordingly. The award of a sole arbitrator shall be binding on both parties as if he had been appointed by agreement.
Nothing herein shall prevent the parties agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator.
In cases where neither the claim nor any counterclaim exceeds the sum of US$ 100,000 (or such other sum as the parties may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at the time when the arbitration proceedings are commenced. (www.lmaa.org.uk)
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(c) * Singapore. This Charter Party shall be governed by and construed in accordance with Singapore**/English** law.
Any dispute arising out of or in connection with this Charter Party, including any question regarding its existence, validity or termination shall be referred to and finally resolved by arbitration in Singapore in accordance with the Singapore International Arbitration Act (Chapter 143A) and any statutory modification or re-enactment thereof save to the extent necessary to give effect to the provisions of this Clause.
The arbitration shall be conducted in accordance with the Arbitration Rules of the Singapore Chamber of Maritime Arbitration (SCMA) current at the time when the arbitration proceedings are commenced.
The reference to arbitration of disputes under this clause shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other party requiring the other party to appoint its own arbitrator and give notice that it has done so within fourteen (14) calendar days of that notice and stating that it will appoint its own arbitrator as sole arbitrator unless the other party appoints its own arbitrator and gives notice that it has done so within the fourteen (14) days specified. If the other party does not give notice that it has done so within the fourteen (14) days specified, the party referring a dispute to arbitration may, without the requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall advise the other party accordingly. The award of a sole arbitrator shall be binding on both parties as if he had been appointed by agreement.
Nothing herein shall prevent the parties agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator.
In cases where neither the claim nor any counterclaim exceeds the sum of US$ 150,000 (or such other sum as the parties may agree) the arbitration shall be conducted before a single arbitrator in accordance with the SCMA Small Claims Procedure current at the time when the arbitration proceedings are commenced. (www.scma.org.sg)
(d) * This Charter Party shall be governed by and construed in accordance with the laws of the place mutually agreed by the parties and any dispute arising out of or in connection with this Charter Party shall be referred to arbitration at a mutually agreed place, subject to the procedures applicable there.
*Sub-clauses (a), (b), (c) and (d) are alternatives; indicate alternative agreed. If alternative (d) agreed also state the place of arbitration. If no alternative agreed and clearly indicated then Sub-clause (a) shall apply by default.
**Singapore and English law are alternatives; if Sub-clause (c) agreed also indicate choice of Singapore or English law. If neither or both are indicated, then English law shall apply by default.
55. Notices
All notices, requests and other communications required or permitted by any clause of this Charter Party shall be given in writing and shall be sufficiently given or transmitted if delivered by hand, email, express courier service or registered mail and addressed if to the Owners, to or such other address or email address as the Owners may hereafter designate in writing, and if to the Charterers to or such other address or email address as the Charterers may hereafter designate in writing. Any such communication shall be deemed to have been given on the date of actual receipt by the party to which it is addressed.
56. Headings
The headings in this Charter Party are for identification only and shall not be deemed to be part hereof or be taken into consideration in the interpretation or construction of this Charter Party.
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57. Singular/Plural
The singular includes the plural and vice-versa as the context admits or requires.
Clauses to , both inclusive, as attached hereto are fully incorporated in this Charter Party.
OWNERS: CHARTERERS:
Name: Title:
Name: Title:
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NYPE 2015 APPENDIX A (VESSEL DESCRIPTION)
GENERAL INFORMATION
1.1 Vessel’s name
1.2 Type of vessel
1.3 IMO number
1.4 Year of build
1.5 Name of shipyard/where built /
1.6 Flag
1.7 Port of Registry
1.8 Classification Society
1.9 Protection & Indemnity Club – full name
1.10 Hull & Machinery insured value
1.11 Date and place of last drydock
1.12 Vessel’s Call Sign
1.13 Vessel’s INMARSAT number(s)
1.14 Vessel’s fax number
1.15 Vessel’s email address
LOADLINE INFORMATION
2.1 Loadline Deadweight Draft TPC
Winter
Summer
Tropical
Fresh Water
Tropical Fresh Water
2.2 Constant Excluding Fresh Water
2.3 Freshwater Capacity
TONNAGES
3.1 Gross Tonnage (GT)
3.2 Net Tonnage (NT)
3.3 Panama Canal Net Tonnage (PCNT)
3.4 Suez Canal Tonnage Gross (SCGT) Net (SCNT)
3.5 Lightweight
DIMENSIONS
4.1 Number of holds
4.2 Hold dimensions 1. 2. 3.
4. 5. 6.
7. 8. 9.
4.3 Height of holds
4.4 Number of hatches
4.5 Manufacturer and type of hatch covers
4.6 Hatch dimensions 1. 2. 3.
4. 5. 6.
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7. 8. 9.
4.7 Is vessel strengthened for the carriage of heavy cargoes?
4.8 If yes, state which holds may be left empty
4.9 Main deck strength
4.10 Tanktop strength
4.11 Strength of hatch covers
4.12 Cubic grain capacity, by hold 1. 2. 3.
4. 5. 6. 7. 8. 9.
4.13 Cubic bale capacity, by hold 1. 2. 3.
4. 5. 6.
7. 8. 9.
4.14 Length overall
4.15 Length between perpendiculars
4.16 Extreme breadth (beam)
4.17 Keel to Masthead (KTM)
4.18 Distance from waterline to top of hatch coamings or hatch covers if side rolling hatches
No. 1 hatch Midships Last hatch
Ballast condition (ballast holds not flooded, basis 50% bunkers)
Full ballast condition (ballast holds flooded, basis 50% bunkers)
Light condition (basis 50% bunkers)
Fully laden condition
4.19 Vessel’s temporary ballast hold(s)
4.20 Vessel’s ballasting time/rate of ballasting
4.21 Vessel’s de-ballasting time/rate of de- ballasting
4.22 If geared state manufacturer and type
4.23 Number & location of cranes
4.24 If vessel has power outlets for grabs – state number and power
4.25 Maximum outreach of cranes beyond ship’s rail
4.26 Are winches electro-hydraulic?
4.27 If vessel has grabs on board, state:
Type
Number/Capacity
4.28 Are holds CO2 fitted?
4.29 Are holds vessel fitted with Australian type approved hold ladders?
4.30 Is vessel fitted for carriage of grain in accordance with Chapter VI of SOLAS 1974 and amendments without requiring bagging, trapping and securing when loading a full cargo (deadweight) of heavy
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grain in bulk (stowage factor 42 cubic feet) with ends untrimmed?
4.31 Is vessel logs fitted?
4.32 If yes, state number, type and height of stanchions on board and which stanchions are collapsible. Also state number and type of sockets on board
BUNKERS, SPEED AND CONSUMPTION
5.1 What type/viscosity of fuel is used for main propulsion?
5.2 Capacity of main engine bunker tanks (excluding unpumpables)
5.3 Number of bunker tanks
5.4 What type/viscosity of fuel is used in the generating plant
Capacity of auxiliary (aux.) engine(s) bunker tanks (excluding unpumpables)
Speed on sea passage Knots ballast
Knots laden
On tons (main)
On tons (aux.)
Consumption in Port Tons (main) Tons (aux.) Working
Idle
CREW
6.1 Number of Officers
6.2 Number of Ratings
6.3 Name and nationality of Master
6.4 Nationality of Officers
6.5 Nationality of Ratings
CERTIFICATE EXPIRY DATES
7.1 P&I
7.2 H&M
7.3 Class
7.4 Gear
7.5 Document of Compliance (DOC)
7.6 Safety Management Certificate (SMC)
7.7 International Ship Security Certificate